Erm... I think usually companies that operate on 5-10% margin is because its diluted margins.

For example, my boss manyak suka trading. He earns RM80 for each tonne of steel. He trades tens of thousand tonnes every year. Most of them are delivered straight to customer from Port Klang although some does make an extra trip through our factory. These are more than enough to cover boss expenses, his salary and Mercedes Benz.

But for overheads, still have to rely on higher margins stuffs. For example, we do steel cutting, all kinds of shapes. My boss would slap at least 10% plus labor charges. Some extra there. For me, if its project related or something that requires accuracy/difficulty, I usually slap around 30-50% inclusive of labor charges (dont ask me why). Not to mention that we also have wastage which was billed to the client but we get to kept it as scrap.

This is partly why I get bored sometimes. Low margin stuffs aint my cup of tea but makes up more than half of our revenue (in fact I think 70% or more). In the end, our diluted margin is only 10% at best. Trading is almost limitless, if money is not a problem. 1% on 100 million revenue will still net you 1million profit, whereas even though I can net between RM600-1000 per tonne of steel processed (at best 2 tonne/day per machine), I still get lower profit than my boss.

This post has been edited by andrekua2: Apr 3 2014, 07:24 PM

Out of curiosity, what kind of steel do you do? Deformed bars? Metal / GI pipes? MS plates?

MS/Carbon/AR400 Plate, low and medium hot rolled carbon bars, cast iron bar, stainless steel round bar, cold drawn round, hexagon, square bars, and seamless hot rolled pipe.

We rarely get involved with construction industry because too many conmen liao. MS Plate all are monopolized by local listed trading house. We only do processing.

Sounds good. Maybe we should come out for tea one of these days. I do get projects from time to time that require some of what you have, especially angles and c-channel

Erm, I can recommend some dealers to you, but I cant really promise anything. The one that my boss trade most right now is Angles and C-channels from China, but we hardly keep stock. Thats why I also dont promote it at all. It sucks when you only have certain sizes leftover from trading.

We're currently also getting from China. I just thought of knowing more people

Hahaha... No problem

I think maybe you deal with my boss before.. Who knows.
BTW, you seem to be getting very good margin on your deals. I guess that's what my boss is missing out on. I really wish he had more appetite going direct to customers instead of distributing them to hardware dealers. In the end, once they managed to get consistent stream of sales, they will be going direct from China too.

Our margin really depends on items we supply. For steel, we get no more than 7%, depending on exchange rate. Sometimes, when the exchange is high, we get only about 4%. We heavily emphasize on raw materials instead, like aggregates, lime stones, armor rock and river sand. The latter two are "banned" products, which gives us good margin. Don't worry, no hanky panky here

We obtain proper permit, AP and K2 before we ship out.

I see. A wide range of variety. Actually steel is one of the laggard when it comes to profit margin. It is also the heaviest but cheapest when you compare the pricing/weight

I thought DKSH surge in earning is due to increase in efficiency, hence the increase in profit margin?

If not mistaken they dispose the logistic business too

lai la Homeritz show me Rm 0.80 today ^^

so fast jalan kereta.
I not yet collect enough leh

aiyo this stock has been mentioned since last year,.....still not long enough meh?
me wait till neck also long liao hahaha

boon will jump in to day i think since he so like buy high

Hello.. anyone know public bank should hold or run?

Fuyoh!


Public Bank kena goreng left right and center!

any reason why kena goreng? the old man suddenly become active ady? i thought he going to dong dong qiang liao

I try to do jumps everyday.

Everyday about 10 mins.

Homer

so Boon3.....should continue chase the homer chicken?
or just let it run on its own