Fairphone 2 Cost Breakdown

We’re making our business model transparent to show how your purchase helps us run our social enterprise, from developing products and social projects to manufacturing, marketing and operations.

Average consumer price
(incl. avg 20% VAT)
525
Taxes

Reseller Margin
€ 118
Product
€ 340
Investments
€ 33
Operations
€ 25
Net Result
€ 9
Currency
€1 = $1.08
Figures are estimates based on an average exchange rate of 1.08 dollars to the euro.
Total sales
140,000
Projected costs are based on selling 140,000 phones per year with exception of investments, which is divided over 250,000 phones in a period of two to three years.
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Taxes

Reseller Margin
118
A considerable portion of the phone’s total price goes to taxes and reseller margins, resulting in an average net sales price of €407. This is the amount we receive and can use to run Fairphone and design, develop and produce the Fairphone 2.
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A large part of the phone’s total price goes to taxes. This includes value-added tax (VAT, which averages 20% across Europe).
Reseller margin
€ 22.97
This tax is for all producers of electronic goods. WEEE is a European Community Directive that stands for waste electrical and electronic equipment, which sets targets for the collection, recycling and recovery of consumer electronics.
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Product
340
Over half of the phone’s price goes to making the product itself. After materials and manufacturing, we use the remaining €67 gross profit to invest in social and environmental programs in the value chain and run our operations.
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As a small manufacturer with low production volumes, materials are an especially significant cost. Combined with manufacturing, royalties and logistics, more than 60% of the phone’s price is used to make the product itself.

We’re also working to improve traceability and find responsible mining sources in our supply chain, like integrating conflict-free tin and tantalum from the Democratic Republic of the Congo.
This €2.31 premium contributes directly into the Worker Welfare Fund at our production partner, Hi-P. The costs made to set up this fund are part of our investments, so the money raised through these premiums are meant to be spent by the workers through a worker representative committee for improvements. Hi-P will also contribute an amount per phone.
Fairphone works with partners to take back and recycle old phones as part of our aim to urban mine some of our materials. In Ghana, we have collected over 3 tons of phones and recycled them in Europe. We will continue to take back phones, as well as reserve some of this budget to initiate activities locally for repair, refurbishment and separation or pre-processing.
* This is an estimation
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Investments
33
Fairphone invests in developing high-performance phones and projects that stimulate social innovation. For the Fairphone 2, we’ve created an original design that embodies our values of openness, longevity and repairability.
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We’ve created an original design with values of openness, longevity and repairability. To do so, we invested heavily in product development, design, engineering both with internal resources and external parties.
Besides supporting the creation of our phones, our value chain, creative, product and legal teams manage projects that influence a more ethical and transparent supply chain. These projects include a Worker Welfare Fund, e-waste programs, social assessments, traceability projects, recycled and hazardous materials research and more. Visit our project pages to find out more.
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Operations
25
Your purchase helps keep Fairphone independent by covering basic operating costs like marketing, sales, IT and administration.
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Sales help us maintain our financial independence by covering operating costs like marketing, IT and administration. To keep our spending in check, we handle customer service in-house and have relied on word of mouth instead of advertising. Our recent B Corp certification recognizes our dedication to addressing social and environmental issues with our daily business practices.
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Net Result
9
After investments and operational costs, we have a result of approximately €9 before corporate tax. We reserve this profit from each phone for unexpected costs or additional investments in social impact programs.

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