There are a lot of shop selling Electrical Appliances such as handphone, Camera, computer and MP3, I am sure you can find many in the Tsim Sha Tsui Area.
I always wonder that there are some of them running in a abnormal way to get their profit.
As base on my observation, there are a lot of problems for them to earn money.
There are certain common points of the shop in general.
Usually there are a lot of fascinating neon or LED decorative light for the brand the are selling.
The sales staff does not wear any uniform
The Sales staff are wearing casual wear, never wear a tie
There are at least 6-12 staff in the shops
The Rent. Usually this kind of shop is situated on the most populated area along Nathan Road. The rent is very high, a shop of 300 Square feet may cost you about HKD$120,000-HKD200,000 a month.
Let me make some assumption on how they run the business.
Assuming they open every day, assume average rent per month is HKD$150,000.00
The Rent per day is HKD$5,000
Ten Staff each have a salary of HKD$12,000 a month, that is about HKD7,000 including P fund and medical coverage, bonus of 13th month salary.
Electricity about HKD$30,000 a month, that is HKD$1,000 a day.
The gross Profit margin of the electrical appliance is about 10-15% depending the discount and products they are selling.
For an example, a Nokia Handphone of selling price $4,000, the shop can earn about $500 before tax.
So if I assume the daily expenditure is HKD$13,000
So they have to sell min. 26 handphones a day and about 52 MP3 player or 30 Camera in average a day in order to break even, if they need to earn money, they have to sell min. 40 hand phone a day, that is a about 5 handphone an hour!
So this is my estimation only, in most of the cases, their price is marked up much higher than those shop in Mongkok like Broadway, Laser, Chung Yuan, Fortress..etc…
And only the foreigner who is the first time coming to Hong Kong Would go to the shop for shopping …
In order to remind the tourist that we have to be careful in shopping in these kind of shop…
We should…
1. Check if the shop is recommended by the HK Tourism Authority or good, there should have the label on the shop entrance area.
2. Compare the price first in other shop
3. Get the goods first and then pay
4. Make sure all the goods have been tested by yourself, watching them packed and all that operation is done on the desk. Do not leave your vision on the goods.
5. If they say there is no such model you want, simply cancel the order
6. Check if the goods are brand new…. Easy to find out from the packing material
7. Check the receipt address and name of the shop is same as on the Shops!
8. Carry the goods yourself back to your hotel.
Happy Shopping in Hong Kong
HK Snob
