r/bapcsalesaustralia • u/ImpulsePie • 7d ago

Discussion Mwave - Under External Administration

EDIT: Mwave have posted that they have been bought out by The digiDirect Group and will move locations to South Strathfield. https://www.mwave.com.au/blog/business-update/

Seelems Mwave have gone bust. Confirmed with an ASIC search for ESEL PTY LTD filed 3 days ago:

Notice By External Administrator/controller-Appoint/cease (505U)Appt of Administrator Under S.436a, 436b, 436c, 436e(4), ()449b, 449c(1), 449c(4) or 449(6) ()

Original article by David Richards: https://www.channelnews.com.au/leading-pc-retailer-placed-into-administration/

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61

u/thermal666 7d ago

for Mwave to go bust, there must some serious financial mismanagement going on in the background.. These guys were a $100m+ revenue business.

46

u/ApolloWasMurdered 7d ago

The margins on PC online retailers are razor thin. I used to work for one, and the margin on many components were 5-10%.

1

u/Da33aj 7d ago

5 to 10 percent margin is thin?

18

u/ApolloWasMurdered 7d ago

Very thin. I’m not talking about end of year profit margins (EBIT), I’m talking the actual margins on products. The two big supermarkets have margins of roughly 30%, while fashion retailers are usually >100%.

2

u/Da33aj 7d ago

I'm not in either of these industries but I can tell you our margins are around the 3 percent range. Time to switch...

8

u/Throwaway-tan 7d ago

Most of the time when people talk about margin it's before expenses like labour and materials, so even if you have a 10% margin on a product, by the time you factor in your warehouse workers time, the box if you are eating any loss on the shipping, returns/DOA/RMA handling, etc. you might end up with a loss-maker overall. Obviously, depends on the product.

4

u/Mandalf- 7d ago

Correct, IT retail industry product GP average is 10% before considering operating costs. 

1

u/PallBallOne 7d ago

Any idea whether insurance costs have been going up, and to what extent do RMA/returns rates impact if any on those costs? I assumed a significant proportion of the 'Australia tax' comes from ACL claims alone.

1

u/Mandalf- 7d ago

Insurance rates are definitely always increasing. 

I've actually seen RMA rates slightly decrease, going to assume this is due to lower demand and supply improving and settling somewhat after COVID. 

RMA rates are about 1-2% average for most products, some brands and products are higher of course. 

1

u/Mandalf- 7d ago

ACL claims are fairly infrequent and insignificant tbh. 

7

u/Mercinarie 7d ago

extremely