Profit Vs Warranty- What would you do?

Please give me your opinions on Profit Vs Warranty, which one is more important to a business?

I have an item which can be sources from two suppliers,


Supplier 1(Profit)
Buy it through vendor who imports the product from HK(they are also a local import business and Ebay Powerseller), the product cost $485 each , and i believe I can get them for $450 each for bulk. However the product is not covered by a local warranty, which means any returns must go through the vendor and shipped overseas for repair.


Supplier 2(Warranty)
Buy from my local supplier for $510(non negotiable) who are a big reputable business, the product will have full Local warranty which means fast turn-around for repairs, which means better protection for my customers.


The product is an OLYMPUS digital camera which retails at $599. I make a healthy margin if I go for Supplier1....

And Olympus gennerally make good quality cameras so the chances of return is low...

I am leaning towards the greedy side with Supplier1, because I have bought single items from them before and their are genuine quality products, but imported from Overseas independently.

Looking forward to hear your views on this.

 

Not being completely familiar with what your business model is or where you're doing your selling (Internet? local? eBay?), I would go with Supplier 1 in this case. As you point out, Olympus is good quality (I have one myself) so the chance of returns is minimal, and the extra margin you get by going with the lower priced supplier gives you more fallback cash in the event that someone does do a return.

 

well I would go for the second deal... It better to be safe then bitten.. you may never know what can go wrong..

 

I'll definitely pay a little more and go with the second deal too. You never know what would go wrong and the local support is definitely much needed.

I had an Olympus camera which I bought from overseas thus forgoing the warranty and boy, it was a big mistake because there were software crashes and the camera shutdown on its own and could not power back up. I am sure they improved a great deal now.

Are you getting the camera for yourself or you are going to resell it ? If you using it for yourself then I say go with option 2 and if it is to go into resell then option 1 but make sure you inform your customer about the warranty issue.

 

I would go for the second option: while your profit is smaller, you'll have peace of mind, and you'll sleep good at night, knowing you are covered.

And, if your customers are happy with your product you can always sell them somethign else (related) down the line: get their email address (start a newsletter wiht tips on using their new camera, etc.) if you sell these online. If you sell them offline, get their mailing address and send specials monthly, or at least quarterly (many may buy for a family member or friend for the holidays or a birthday)

 

I think it depends on the volum you expect. What is your plan are you going to sell an occasion Olympus or do you expect to be the next powerseller and sell hundreds.

I would go for the safe and less profitble way if it's not your intention to sell alot but if you do I would go for option #1
As for warenty I would make it clear that in the event of a breakdown the camera needs to be shipped abroad and it would take some time and maybe you could offer a substitute or something.

just my thoughts

 

Thank you for the replies, it has given me some food for thought.