Mark up on golf gear?

[Deleted member 18588]

You say that but the trade price is usually exclusive of Vat and the sales price in obviously inclusive of Vat so the pro looses the whole amount out of his mark up

Eh!?

If a manufacturer supplies a club to a pro' they will add VAT to the trade price (they have no option if their turnover exceeds the threshold).

Therefore if the hypothetical driver's trade price is £170 exc VAT the pro' will be invoiced a total of £170 + 20% VAT = £204.

If he then sells it at £250 inc VAT the mark up is £208.33 - £170 = £38.33 and the pro' will have to pay HMRC £7.33 nett VAT.

 

[351DRIVER]

You say that but the trade price is usually exclusive of Vat and the sales price in obviously inclusive of Vat so the pro looses the whole amount out of his mark up

#

You could not be more wrong



1 charging VAT is not optional
2 a business would not receive the goods without a proper VAT receipt

Metal Mickey has given a perfect example above of how VAT works

 

[Hobbit]

Eh!?

If a manufacturer supplies a club to a pro' they will add VAT to the trade price (they have no option if their turnover exceeds the threshold).

Therefore if the hypothetical driver's trade price is £170 exc VAT the pro' will be invoiced a total of £170 + 20% VAT = £204.

If he then sells it at £250 inc VAT the mark up is £208.33 - £170 = £38.33 and the pro' will have to pay HMRC £7.33 nett VAT.

And out of that profit, and all the other profits, he has to pay his other costs, including buying in more stock, before he thinks about his own wage. A club pro doesn't make his fortune out of selling tees and a sleeve of balls

His best sellers, apart from the odd weeks shifting a set or two of irons, is the mark up on drinks and chocs on a comp day.

Without the pro's retainer from the club, and some don't even get that now, a club pro really struggles.

 

[freddielong]

#

You could not be more wrong



1 charging VAT is not optional
2 a business would not receive the goods without a proper VAT receipt

Metal Mickey has given a perfect example above of how VAT works

What I mean is if something is quoted at trade at £100 the pro will have to pay £100 plus Vat £120 he can then claim the £20 back so it costs him £100, if he then sells it at £200 he has to pay £40 to the vat man, so he looses the full 20% out of his mark up.

 

[Deleted member 18588]

What I mean is if something is quoted at trade at £100 the pro will have to pay £100 plus Vat £120 he can then claim the £20 back so it costs him £100, if he then sells it at £200 he has to pay £40 to the vat man, so he looses the full 20% out of his mark up.

He claims the £20 VAT paid out of the £33.33 VAT collected in a total sale price of £200 so he actually pays HMRC £13.33.

Therefore, his gross profit on that transaction is £66.66 (i.e. £200 nett of VAT less the nett purchase price of £100).

Hope that helps.

 

[Deleted member 18588]

And out of that profit, and all the other profits, he has to pay his other costs, including buying in more stock, before he thinks about his own wage. A club pro doesn't make his fortune out of selling tees and a sleeve of balls

His best sellers, apart from the odd weeks shifting a set or two of irons, is the mark up on drinks and chocs on a comp day.

Without the pro's retainer from the club, and some don't even get that now, a club pro really struggles.

Absolutely agree.

It seriously baffles me why and how many carry on. Partially reliant upon keen young assistants working all hours for the Minimum Wage.

 

[Val]

Most pro's run with an overdraft also which costs them for stock lying on the shelf. It's a tough gig making money in a pro shop. They make more profit on selling single sleeves of balls than they do on clothing and equipment every year

 

[Deleted member 16999]

The more forward thinking Pro are now establishing themselves on the net, either fleabay or amazon or both, the Pro Shop is merely a front of house.

 

[Hobbit]

The more forward thinking Pro are now establishing themselves on the net, either fleabay or amazon or both, the Pro Shop is merely a front of house.

You're not wrong. Use the internet and reach x many thousands of customers. Stick with just the club membership and reach x many hundreds.