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How Much does it cost to Make a Racquet ?

Discussion in 'General Forum' started by clawhammers, Dec 2, 2016.

  1. clawhammers

    clawhammers Regular Member

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    Dear All,

    Up till today, we never know the exact manufacturing cost for a Racquet, due to such information is particularly hard to get.

    Theoretically there are 3 basic components in calculating the manufacturing costs, which consists of (1) Factory Costs, (2) Shipping / Logistic Costs, and (3) Insurance (if any).

    Then when the product arrives at the designation country, it will be imposed with the forth component, i.e., (4) Import Duties, as applied by the Government. These 4 components are commonly terms as Landed Costs / Cost of Sales.

    Please also note that a product are also subject to the expenses / overheads incurred for running the company, and also include the costs of marketing / promotion. There are also other significant component, which is endorsement / sponsorship money payable to the athletes and tournaments.

    Then, finally, the gross income is taxed by the Government. The remaining thereof is commonly terms as Net Income.

    At this point, the importer / distributor then sell the racquet to retailers (probably) at 50% of its full retail price. The margin between the selling price to retailer and the retail price is commonly terms as Gross Margin.



    Question:
    How much the profit margin do Yonex make ?

    I cannot answer this, due to the lack of data and information, but I estimate between 8% to 10% (on factory cost) before tax.


    Question:
    If a product is paying retailer at 50% margin, then perhaps they are making huge benefit ? How much the retailer profit look ?

    Usually, Discount stores are engineered to accommodate a higher merchandise density. Combine this with healthy sales & lower retail costs, then they could achieve a better operational cost.

    I am taking Sunrise (Yonex Singapore) as an example. They are arranging Discounts / Sale events regularly.
    Further the logistic costs from manufacturing location, i.e., Japan to Singapore is less expensive compared to logistic costs to Europe or USA.

    The first picture is the Sale held on 27 May 2016

    The second picture is the Sale held on 2 December 2016

    You can see the discounted price for the racquets, as follows:

    Voltric 80 E-Tune (SG$140 at May 2016) and subsequently (SG$130 at December 2016)

    Nanoray Glanz (SG$110 at December 2016) – surprisingly considering this is 1 of the most expensive RRP set by Yonex.



    [​IMG]


    [​IMG]



    Last but not least, kindly note this writing is not concise, and merely expressing my surprise to found out the Discount Price set by Sunrise in Singapore.

    :)
     
    visor likes this.
  2. visor

    visor Regular Member

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    A while ago there was some discussion on per unit factory cost being around $30-60 USD, iirc. So the rest is made up of R&D, logistics, advertising, sponsorship, markup, etc.
     
  3. wlachan

    wlachan Regular Member

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    IDK but for many retail products, every extra layer will double the cost. For instance, if a product was sold for $10 at retail, the retailer might bought it at $5 from the distributor which again, paid $2.5 for the manufacturer which might have a margin of 10-20% after all the expenses. The actual distribution and pricing are more complicated but this should give you a rough idea.
     
  4. Calvin Lee Wei Zhong

    Calvin Lee Wei Zhong Regular Member

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    So clawhammers where is that place in SG. Love to go there.
     

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