Calculation of Mark Up - CONFUSED!!

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W

woodman

Free Member
Jul 1, 2011
2
0
  • #1
    Hello,

    I am new to this forum and business.

    I intend to import products from Asia, and I have been trying to calculate a good Mark Up on my products. In order to be competative, I offer free delivery in the UK, and the customer pays VAT.

    I have a spread sheet that calculates the mark up, and am not sure if it is correct.

    What is a good mark up?

    Could someone look my spreadsheet, please?

    Thanks.

    K
     
    Paul Kelly ICHYB

    Paul Kelly ICHYB

    Moderator
    • Jan 21, 2008
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    icanhelpyourbusiness.co.uk
  • #3
    K,

    are you in the UK? If yes, are you VAT registered?

    Depending on the product, using markup may not be the simple answer, as it may lead to you being over or under priced for the item.
     
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    DavidWH

    DavidWH

    Free Member
    Feb 15, 2011
    1,785
    358
    Manchester
  • #4
    I don't have any set mark up values.

    Usually 150 - 300%, but depends on the job, and the perceived value. Some signs look really expensive, but the material cost doesn't cost much more than cheaper alternatives. Because it looks expensive, and it is more durable, lasts longer, better image for the company, that is reflected in the price.

    Someone wanting a smaller sign (ie for a gate) will pay less, as once again perceived value.

    However if I am selling an item, off the shelf, then that's it price regardless, know what your competition is charging (like for like), and if they're not, know why yours is better.

    I work all my prices on NET value, but don't items so i don't have clue.
     
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    W

    woodman

    Free Member
    Jul 1, 2011
    2
    0
  • #5
    Hello,

    Thanks for your comments. I import wood products from Asia. They are unique and I am VAT registered.

    I have taken the Cost Price = £85.00
    Haulage for free - (to be competative) = £60.00
    VAT on Cost Price = 16.80

    Sell at £299.00
    Haulage is Free = £60.00
    VAT on Sale Price= £49.83 (to be competative

    VAT to HMRC = £33.00

    So I subtract from £299.00
    VAT of £33.00
    Subtract Cost Price of £85.00
    Subtract £60.00
    I make (hopefully) £121.97

    I calculate a Mark up of 49%.

    I hope this is right!!!

    There is very little competation, and by being competative I hope to be successful. The product range is varied and the Mark Up on some items is approx 35%

    Thanks.
     
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