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Product Pricing

bellasp

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Feb 22, 2018
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Can someone please help me to understand the pricing mark up of my product, sorry to sound silly but I get confused as to how to work out the mark up to sell to department stores whilst still making a profit

for example say my product cost £4.00 to make
I sell it on my website for £9.99
how much would I sell it to department stores to still make a profit?
 
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Raoul Duke

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Can someone please help me to understand the pricing mark up of my product, sorry to sound silly but I get confused as to how to work out the mark up to sell to department stores whilst still making a profit

for example say my product cost £4.00 to make
I sell it on my website for £9.99
how much would I sell it to department stores to still make a profit?

Have a gander at this thread by @MidwestLandlord
Notable! - The Basics of Pricing
 

MidwestLandlord

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Can someone please help me to understand the pricing mark up of my product, sorry to sound silly but I get confused as to how to work out the mark up to sell to department stores whilst still making a profit

for example say my product cost £4.00 to make
I sell it on my website for £9.99
how much would I sell it to department stores to still make a profit?

50% is roughly the golden number for retailers.

So if your MSRP is $9.99, they would expect to get it for about $5
 

cmor16

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for example say my product cost £4.00 to make
I sell it on my website for £9.99
how much would I sell it to department stores to still make a profit?

Make sure you are factoring in ALL costs, not just manufacturing (marketing, packaging, shipping, your time, office space, etc.) Retail will squeeze you for every penny so it's important to understand the true cost of the product.
 
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DrkSide

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The markup that a retail store gets can be dependent on what industry you are in. For example while computers will have a relatively low markup by the retailer the accessories (mouse, keyboard, cables) will have a much higher markup.

@MidwestLandlord is spot on. This is known as keystone pricing and what many retailers look for.

Product cost: $5
Wholesale Cost: $10
Consumer Cost: $20

We try to get as close to keystone as we can but don't meet that on some products.
 

Scot

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You also need to factor in if you’re using a distributor.

For example. Product costs $5 from factory. Sell to distributor for $10. They sell it to retail at $15 and the consumer pays $20.
 
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