acceptable mark up?

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ashbash

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Jan 26, 2011
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  • #1
    Having read on other threads some pointed comments from very experienced retailers about unrealistic expectations from producers , what differential between wholesale and retail is generally thought reasonable?

    If I am selling a product wholesale at £1.25, what would be a realistic retail figure for mid to premium markets? Is there an accepted formula that most retailers use?

    I have stumbled into production and retail almost by accident, and so need to learn quickly about these things before I blow my best chance!
     
    kulture

    kulture

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  • #3
    It is not easy to answer your question without more details. Acceptable markup on jewellery, where an item may stay on the shelf for a long time, is far higher than the markup on electrical goods and accessories.

    Some retailers do not use a straight multiplier, but rather aim at a pricepoint and then decide if it is worth stocking. Specifically they would look at the product and think "I could sell that at £10 or I can only get £2 for that" and then decide whether to stock based at your cost of £1.25
     
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    Pap_sak

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    Mar 12, 2009
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  • #4
    Mark up if a funny one - some things have a very low margin - ether to the culture or because of the quaintity sold.

    For a new product or brand retailer would generally expect to double up on the cost price, taking out vat. Therfore 1,25(ex vat) would be 2,50 (incl vat)
     
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    ashbash

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    Jan 26, 2011
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  • #6
    Thanks for the feedback, here are more details:

    I have designed and currently print a range of greeting cards that I sell to five shops for £1.25 wholesale, and they are selling well at £2.50-£2,85, with repeat orders from all but one shop. That shop was a chaotic bookshop that basically hid them amongst other cards in shoe boxes at the back of the shop, still had good feedback about the cards but he ran out of money and could not order anymore.

    The cards sell well in art and craft centres, independent home design shops, and from my own shop/gallery in an antiques centre. So far I have been happy to produce and sell at this level, and to grow slowly...but next week I am at a greeting card trade fair and for some reason have suddenly lost a bit of confidence, and am querying my pricing, hence my original post.

    However I take heart from Faerie's point about higher price/lower turnover, it is about setting a value rather than a price, so I think I have it about right, and will keep them there.
    Thanks all.
     
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    ashbash

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    Jan 26, 2011
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  • #9
    Faerie - I don't think they would at that price, I think £3 is a major sticking point for standard type cards. Mine are A5 ,(A4 folded), with no glitter or anything, just words, so no premium to be added for hand-finishng or extras.

    However, in some specialist art/card/paper goods shops like Paperchase I have seen much smaller cards selling at £2.70+, so I think I am pitching about right.
     
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    ashbash

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  • #15
    Well I went and did the show, very interesting experience, learnt lots, mostly How Not To Do A Trade Show, but did ok with eleven confirmed orders for my cards, and there were many other small traders who had no orders at all on the two days, so pretty happy.

    Pricing did not appear to be an issue to the retailers who liked my range, though a couple of agents felt the price was too high , but when I showed them my orders they said ok, not for them but they could see there was a market there all the same.

    Orders came from all sectors, traditional and young buyers, so it looks like the cards work at that price range for enough people.

    In terms of having a good stand at a trade show, I probably did everything wrong; minimal decor, poor colour and placing of stock, boxes and bags in view, no tables of flowers, curtains or sweeties, but still...it was fun in the end!
    Thanks for your feedback and support, please feel free to pm me if you have any questions about the experience!
     
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    ashbash

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    Jan 26, 2011
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  • #17
    It was Progressive Greetings Live at the Design Cente Islington, a specialist trade show for the card industry. It was their third show, and from what I could see they did a very good job, highly efficient and friendly, but it was obvious on the second day that trade visitors were quite down on hoped for figures.

    There were a lot of new starts like me, some had been trading for about a year and were doing ok, and the well established big companies were there too.

    Big learning curve for me, and I think it will become the place to launch greeting cards as dedicated buyers will find it easy to focus on products there, but the competition is huge.

    I am hoping to get follow on orders from those who expressed an interest but did not order at the show, and both Waterstones and the National Trust looked keen, though I was warned they are killer negotiators so might have to be flexible if I am lucky enought to get an enquiry from them...though I did tell Waterstones they couldn't afford me! Got a laugh, and they didn't walk away too quickly ...:eek:

    Er..anything else I can think of I will post, I spent much more than I wanted to on brochures, flyers etc, parking was horrendous, and driving there and back was terrifying...london traffic with suicidal bikers and cyclists is like a war zone!

    Glad I did it, and will be better prepared if I decide to go again, if you are interested in going let me know
    Ash
     
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    H

    holmewoodorg

  • #18
    F1ink said:
    printer ink has a very low mark-up :mad:
    Have to offer the service and 'extras' to get regular customers
    Click to expand...

    Are you sure? I export printer ink via ship to a distributor who picks it up in Durban and then he freights it up to landlocked Malawi. Due to the bomb threat on planes no printer cartridges can be carried on planes so we bring it in by ship. As for mark up a 2 pound cartridge over here sells for 8 pounds there.

    He also sells mouthwash into the ok supermarkets and Greenwoods pharmacies in Zimbabwe. He buys it from me for 60p and sells it there for 3.50 pounds. The import duty and taxes though is 40% and the shipping costs are 140 pounds a pallet.
     
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    holmewoodorg

  • #19
    ashbash said:
    Well I went and did the show, very interesting experience, learnt lots, mostly How Not To Do A Trade Show, but did ok with eleven confirmed orders for my cards, and there were many other small traders who had no orders at all on the two days, so pretty happy.

    Pricing did not appear to be an issue to the retailers who liked my range, though a couple of agents felt the price was too high , but when I showed them my orders they said ok, not for them but they could see there was a market there all the same.

    Orders came from all sectors, traditional and young buyers, so it looks like the cards work at that price range for enough people.

    In terms of having a good stand at a trade show, I probably did everything wrong; minimal decor, poor colour and placing of stock, boxes and bags in view, no tables of flowers, curtains or sweeties, but still...it was fun in the end!
    Thanks for your feedback and support, please feel free to pm me if you have any questions about the experience!
    Click to expand...

    We do the Birmingham NEC Spring and Autumn fair costs 10k a time. To advertise your products in Argos is 250,000 pounds a quarter of a page. A deal we had been negotiating with co-op for the last 4 months fell today as they had a company that was paying them 35,000 pounds just for the opportunity to place their products in their store. That is one line (glue). I run a few businesses but best of luck and well done you for getting trade.
     
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    FaerieB

  • #25
    When we start the shows again (hopefully soon) Top Drawer Spring and Autumn will be the only shows we do ... They were always our best shows ;).... I know lots of other small designers/companies who feel the same ... it's a really lovely fun show to do and there's some fab deals on hotels for the shows ;) x
     
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