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IT's Most Outrageous Markups?
masteritrit asks: "I have seen some really outrageous markups from IT companies. Cisco sells memory for a router I have for $1500 bucks and I bought it directly from Kingston for $56 bucks. I also had someone at storagetec accidentally reveal that their standard markup is 700%. What are some examples of this that others have seen and how do you feel about it?"
When i was a salesman at compusa (a few years back) we sold USB cables for $30+ when they were only $5 or so at cost. I've seen grocery stores selling them for much less than $30. The same thing went for parallel printer cables.
However, there was one adapter (PS2->AT or serial->ps2, i forget which) that we charged ~$50 for when it was listed as $.50 cost in the computer... 1000% profit is not bad.
That $1,500 Cisco memory is, I think, good for everyone - it contributes to Cisco's bottom line by ripping off the ignorant and lazy, thus keeping them from having to raise prices for the rest.
But for a contrasting situation: about 5 years ago I worked for a dominant office-equipment supplier in the Rocky Mountain region (name left out not to protect the guilty, but to avoid self-embarassment...) in their PC/printer repair depot. We outsourced our monitor repairs, and would routinely double whatever the price was - whether it was mainly parts or labor - for no good reason other than that we could. We sold Laserjet fusers for a decent markup - until we changed from geniune HP to remanufactured parts, and kept the prices the same... so a $180 fuser we sold for $215 became a $40 fuser sold for $215... I could go on. They did that 'cos they were sleazy, and I hated working there.
I've been on the lookout for a 4-pin to 4-pin Firewire cable at a decent price for awhile now; usually I see them for a ridiculous $40-$50 most places. Recently when my need became more urgent, I swung by Fry's and found them for $9. That's just a case of buyer-beware - if you're concerned about saving money, make sure you're not being fleeced before plunking down your cash. Do some legwork if the price difference is worth your time.
Another example: inkjet printer makers sell the printers at a loss and make it up by selling carts at inflated prices. That's OK by me, when alternative sources for carts and ink are available. When they started putting ICs into the carts to prevent "counterfeiting", that's where I draw the line, and it turns out that inkjet printers from 2-3 years back (available for dirt cheap on eBay and Craigslist) still work just fine with $3 cartridges (also from eBay)....
The really outrageous markups are in the financial business anyway. $35 because they let your credit card payment check sit for 3 days before processing it? Bah!
Perfectly Normal Industries
...for one of our AIX RS/6000 servers. I forget the exact quote amount, but it was, I think, around $1,200 for 512MB. We bought the same RAM from Kingston for less than $400 (after the IBM rep almost blew his top arguing that if we didn't buy from him, we'd void the warranty).
So we crack the case to put in the new RAM, and what do we find? The *exact same* Kingston RAM module is already providing us with our first 512 MB of memory. Priceless.