FlyerTalk Forums - View Single Post - Who pays suggested retail price for external hard drives?
Old Jun 15, 2008 | 7:57 am
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sbm12
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Originally Posted by slawecki
i think the vast majority of drives are sold at retail or negoitated price.

my wife placed hundreds, maybe even thousands of drives every year for Xerox. most went into large RAID units for federal govt. no 99.95 best buy units in there.
While they aren't $99.95 Best Buy deals, major purchasing contracts actually generally get better pricing, albeit on different hardware.

MSRP is a strange beast in many industries. The key is not necessarily MSRP, but what the discount offered to resellers and distributors is. I can buy Cisco hardware at 30% off list from my distributor, and that is without any extra negotiations that can bring the discounts up to 50% pretty quickly. But I only get 3-4% off on Microsoft licensing since I only buy in small quantities. For larger companies they can also negotiate with M$ so they can get more points off there.

If a retailer is getting 30% off and sells at MSRP they get to keep all 30% of the profits, but their sales will likely be lower than a competitor who sells at 20% markup. And since most of what we're talking about are commodity parts where we don't need a relationship to back up the purchase, there is not much sense in paying extra to buy from your local retailer. The big retailers basically shave out tiny profit margins and hope to make it up in volume, and they seem to be doing OK at that for the most part. But if the discount were smaller then you'd pay much closer to MSRP.
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