Ooh, sorry, but I have to chime in on this. Percentage based pricing is the norm for any transaction for any amount. 30-50% is typically the retailers take. This also applies to claimed "low margin" PC hardware, games, etc. Manufacturing/distribution (including principles like LEAN, etc.) is something I could honestly write a book about...a book that would sell poorly. However, I've seen the invoices, have been good friends with the right people, etc. At the end of the day, a manufacturer targets 3x costs to account for distributor + retailer. Depending on size, the retailer will buy from a distributor (in most cases) or a manufacturer.
Distributors in terms of the above actually DO have super slim margins because they are simply middle-man. They only exist to ship the product to smaller companies.
Distributors in terms of the above actually DO have super slim margins because they are simply middle-man. They only exist to ship the product to smaller companies.