Community Chat

[chrystaltree]

No one here can answer that question,  we can make something up, but we don't have the foggiest idea how all of the thousands upon thousands of retailers determine price.  I've never worked in retail but my common sense tells me that if differes....greatly....from retailer to retailer.  A store like H&M wouldn't use the same formula or criteria that a store like Tiffany's and Tiffany's would use the same formula and criteria that Lord & Taylor would use.  They are all retailers but very different.

[Marienkaefer2]

I worked in retail for a long time during high school and college.  That was in the 1980s and 90s, so things most likely are different now. 

I think it really depends on the items being sold, the retailer (chain vs mom and pop) etc.

When I worked in a major dept store, the markup was 100%.  I knew this because I used to check new merchandise in (mainly clothing) and the wholesale prices were on the invoice.

HOWEVER, the wholesale prices were extremely low at that time. 

A women's sweater that sold for say $20 at that time (remember 30 years ago), had a wholesale price of $10.00, sometimes lower.

On the other hand, my grandparents owned a paint and hardware business and I remember their markup was only a couple of dollars, or even less.  

So I wouldn't make a general statement about retail across the board.

[sidsmom]

When I watch Shark Tank, it always takes one aback

when the investors would start asking the presenters....

’how much does it cost to make’, 

‘what are your expenses’ & 

‘what do you price it at?’

Those numbers can be light-years apart depending on the product.

I always finish watching the show looking at my ‘stuff’ differently.

[granddi]

A friend with an independent furniture store said Triple mark up PLUS freight. 

[Warrior2022]

My father was a optician and own 7 stores.  About 25=30 years ago,  Eyeglass frames were about a 200% mark up.

[Desert Lily]

This question doesn't have a simple answer. When I was a Buyer, jewelry and holiday goods had a 400% mark-up, and when they were put on sale they still had a 100% mark-up. Necessities (like at the grocery store) have a smaller mark-up because they turn over more rapidly. The term "mark-up" is ambiguous and varying. A smaller retailer gets a smaller discount from a wholesaler, while a larger retailer has "economy of size" and can negotiate a minimum of 25% more off the wholesale price. Home decorative accessories may have had a 100% mark-up from the wholesalers "price list", but the wholesale price is not the same for every retailer.

Every retailer has business expenses and that's somewhat separate from pricing. The business plan may illustrate how much income is required minus expenses to show a profit. But, different suppliers may have different discounts/mark-ups for the same retailer, so there isn't always a standard mark-up. Expenses might be lowered within payroll, capital equipment, benefits, plans to expand, etc.

If a retailer does private labeling and eliminates the middle man, the retailer can achieve a much greater mark-up. No product is exactly the same as the private label product for consumers to compare retail prices. (I loved being a product developer and a Buyer...it was creativity + math) Marketing helps create the perceived value  and how the product is a necessity for the consumer. Directly dealing with manufacturers creates lucrative relationships, and direct importing also creates a greater "mark-up."

The current online retailing has issues of shipping, warehousing, partnering with shippers, etc. Some suppliers ship directly to the consumer for the retailer. B&M stores used to keep inventories at a minimum with point-of-sale software having re-order levels. B&M stores paid/pay taxes on their inventory annually in most states.

Retailing continues to evolve and IMO mark-ups can be a complex issue.