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Expert
Posts: 1414
 
| OT - Do any of you guys own or manage a retail store? I'm looking for someone who is involved with pricing the products.
Do you have a certain percentage or formula you use based off your cost of the product? Do you price using a different method? I don't need to know actual numbers, just curious how you determine what you are going to sell the product for. Any input would be appreciated. |
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 Loves to compete
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Location: Oakdale, CA | I usually go with recommended pricing on item. Also I have competitors on my street I'm a conveniance store I go with the theory I would rather sell alot and make a little than not sell that much and make alot. I try to be super competitive the more foot traffic the better. Hope that helps also depends on your overhead. |
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Expert
Posts: 1414
| What if there is no recommended pricing? I agree I'd rather make less and sell more so our store is always fresh and able to offer new and different products. |
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 Off the Wall Wacky
Posts: 2981
Location: Louisiana | roanrider - 2016-10-25 8:18 PM
What if there is no recommended pricing? I agree I'd rather make less and sell more so our store is always fresh and able to offer new and different products.
Research! I work at a western store and while my boss has set % for most categories, if she notices larger box stores selling under retail, she'll match their price if she can. She will just google the item and style number to see what pops up.
Some items it's obvious they buy in bulk and get better pricing and she just can't go as low. Some items she can't believe how much extra they mark up.
She tries to be fair while also making a profit.
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 Expert
Posts: 1482
Location: on my horse | when I worked at a tack store we took what we had purchased at bulk wholesale price and increased price by 40% on average items. Some items we increased more or less depending but 40 was the average. Place has been in business for almost 55 years so I guess it's working for them lol. It seems like a lot but wholesale pricing is so bargain basement for most items so it wasn't that bad. I would say that the store I'm speaking of is competitively priced compared to others around our area.
For example, winter blankets, saddle pads, headstalls, reins, horse boots, and human boots were sold on the 40% system, however leather working tools, some gift items, art, specialty tack, etc. were sold on a different percentage scale. Also, some wholesalers we used were cheaper or more expensive so if we could get away with it we would adjust for more profit for us or take a hit for a more popular item that cost us more but sold very quickly. |
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Veteran
Posts: 234
| It totally depends on what type of merchandise you are selling and how many other places are close to you and selling the same or close to the same stuff. Research is the key about your other competitors and how much the market will bare. generally however what works for us is 20 to 30 percent above cost of goods but shipping and freight must also be factored in |
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 Cute Little Imp
Posts: 2747
Location: N Texas | This is very interesting because I thought the standard was 2 1/2 times the cost.
I went into a local store inquiring about selling my items there and he told me on decor type stuff that his markup is 2 1/2 times. There's no way that I can reduce my prices that much to sell wholesale to him and it be worth it to me.
On large items like furniture it's a little less. Guess it depends on what you're selling.
My suggestion is to get on Etsy and check out their message boards. There's a wealth of knowledge over there and you'll learn a lot! |
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Cute Little Imp
Posts: 2747
Location: N Texas | I wanted to add that it also depends on if you're making the items yourself, or buying wholesale and reselling.
If you're buying and reselling, pricing is way easier to figure out than if you're making your own items.
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 Googly Goo
Posts: 7053
| I'm a car dealer so I doubt my pricing models are much good to you. You have to price based on supply and demand. Competitive research is a must. Elasticity of demand is an important factor but you really must make sure that you margins are high enough to cover all costs. Make sure you have done a cost analysis, taking into account all daily expenses, to determine how much gross profit you need to break even on a given day. |
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 Own It and Move On
Location: The edge of no where | Gunner11 - 2016-10-26 8:52 AM This is very interesting because I thought the standard was 2 1/2 times the cost. I went into a local store inquiring about selling my items there and he told me on decor type stuff that his markup is 2 1/2 times. There's no way that I can reduce my prices that much to sell wholesale to him and it be worth it to me. On large items like furniture it's a little less. Guess it depends on what you're selling. My suggestion is to get on Etsy and check out their message boards. There's a wealth of knowledge over there and you'll learn a lot!
Not for tack - there's no way you'd ever get that.
Most companies have a pricing policy that you must follow to maintain your standing as a dealer. |
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Cute Little Imp
Posts: 2747
Location: N Texas | MS2011 - 2016-10-26 10:00 AM
Gunner11 - 2016-10-26 8:52 AM This is very interesting because I thought the standard was 2 1/2 times the cost. I went into a local store inquiring about selling my items there and he told me on decor type stuff that his markup is 2 1/2 times. There's no way that I can reduce my prices that much to sell wholesale to him and it be worth it to me. On large items like furniture it's a little less. Guess it depends on what you're selling. My suggestion is to get on Etsy and check out their message boards. There's a wealth of knowledge over there and you'll learn a lot!
Not for tack - there's no way you'd ever get that.
Most companies have a pricing policy that you must follow to maintain your standing as a dealer.
I meant that if you purchase something wholesale, you'd mark it up 2 1/2 times to have your retail price. That's why I could never sell at wholesale pricing if that's what stores are expecting to mark it up to. |
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 Popped
Posts: 20421
Location: LuluLand~along I64 Indiana | we are a ag dealer for a national company. we do a matrixed markup on manufacture list pricing. certian times thru the year we will run a discount sale from our price point. we do not have a ton of market competiton and our sales will show an average of 25% over cost for a year end total.
matrixed pricing is a larger marging for smaller costing parts vs smaller margin for larger costing parts. |
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Expert
Posts: 1414
| Thanks for all the replies. We have a home décor, lighting, furniture store. We mostly buy wholesale, make some stuff ourselves. We have done TONS of research on what others are selling the exact same product(s) for. I found several different stores (all across the country) and their pricing is all over the board.
I realize it varies greatly based on the product itself, your region, etc. We could not survive on a 20% markup and we'd not sell a thing if we marked it up 250%. We know our customers, we know what sells and have been very happy with how business is going. We just spend so much time coming up with the price on each item I was curious if there was a "formula" folks use.
Thanks again. |
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Extreme Veteran
Posts: 490
| When I managed the feed store, his minimum markup was 30%. |
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Googly Goo
Posts: 7053
| roanrider - 2016-10-26 11:23 AM Thanks for all the replies. We have a home décor, lighting, furniture store. We mostly buy wholesale, make some stuff ourselves. We have done TONS of research on what others are selling the exact same product(s) for. I found several different stores (all across the country) and their pricing is all over the board. I realize it varies greatly based on the product itself, your region, etc. We could not survive on a 20% markup and we'd not sell a thing if we marked it up 250%. We know our customers, we know what sells and have been very happy with how business is going. We just spend so much time coming up with the price on each item I was curious if there was a "formula" folks use. Thanks again.
Most industries have groups of owners that get together to discuss best practices. They might be called "20 groups", "focus groups" or something along that line. Study the industry rags and see if you can find one. I get together with a group of car dealers 3 times a year. We study each others financial statements, market share, csi, everything. |
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Any retail store owners, managers on here?