Typical retail markup?

[HankMcSpank]

I realize it's a broad brush type question, but what markup would a typical bricks & mortar retailers add on the products the buy in? (If it makes any difference the genre I'm thinking here is scissors)

Is 50% markup considered reasonable or do retailers not get out of bed for anything less than 80%

 

[deniser]

Double plus the VAT then round up to the nearest price point as a general rule of thumb but I have never sold scissors so don't know if that's different.

Depends what it is of course - if it looks like it might sell for more then put it on for higher.

If it's less than double plus VAT I won't stock it in the first place.

 

[fairdealworld]

It does depend a bit on the product. I sell some foodstuffs as well as a wide range of handcrafted items and on some very fast selling food products you get less of a margin but, of course, you make that margin more often. Chocolate is probably the best example I can give for my own products, smaller margin but fast sales and no wastage. I imagine that a decent pair of scissors would always sell - so no wastage - but also that sales would be variable (people may need scissors but in contrast they crave chocolate + they don't constantly need to buy more scissors but they do feel the need to constantly buy more chocolate) so the stock you purchase might be in your store for very varying lengths of time therefore that stock has to 'pay' for its shelf or hanging space by a much better margin on each item.

Like deniser I wouldn't stock this type of product for less than double plus VAT as it wouldn't justify its display space for less than that.

 

[snakeeyes121]

Depends entirely on the llook can market, no?

Double plus vat seems about right for many sectors, but I wouldn't discount stocking something just because it has a lower margin.

Then you have to look at local competition, the price online etc etc it's pointless out pricing yourself to keep tto the magical percentage.

 

[and_next]

Anyone in the computers' industry comment on this, double plus VAT I imagine would not sell. I currently repair computers and am looking into getting into retail, the margins look horrendous though! Im still thinking of going ahead as the position of the shop will improve the repair side of my business....and I like a challenge.....I think

 

[Alan]

Obviously varies by sector. My limited experience says things that go out of fashion quickly or have short life span need a higher margin 60% or more, hardware (like scissors )that you can sell year after year so holding stock is sort of inflation proof you may be able to cope with a lower margin like 40%.

There are some sectors, that have very high turn over and potentially drop shipping options (like some IT equipment) the margins can be very slim, like 10% or 15%. Although I fail to see how any one but the biggest make any money at this level.

 

[and_next]

Obviously varies by sector. My limited experience says things that go out of fashion quickly or have short life span need a higher margin 60% or more, hardware (like scissors )that you can sell year after year so holding stock is sort of inflation proof you may be able to cope with a lower margin like 40%.

There are some sectors, that have very high turn over and potentially drop shipping options (like some IT equipment) the margins can be very slim, like 10% or 15%. Although I fail to see how any one but the biggest make any money at this level.

My research suggest those 10-15% figures are spot on

 

[Alan]

My research suggest those 10-15% figures are spot on

Yes it is a tough market, as my rule of thumb is you need to spend 20% on marketing => based on that unless customers find you because you are a retail big name or sell supplementary high margin items (the real trick), you are destined to lose 5-10%.

My gran (born 1901 and dead 20+ years) used to work in a shoe shop and advised me, if I spend all that effort on selling a pair of shoes I make sure to sell then two pairs of spare shoelaces and a tin of polish, you can make as much on the extras as the shoes.

 

[and_next]

Yes it is a tough market, as my rule of thumb is you need to spend 20% on marketing => based on that unless customers find you because you are a retail big name or sell supplementary high margin items (the real trick), you are destined to lose 5-10%.

My gran (born 1901 and dead 20+ years) used to work in a shoe shop and advised me, if I spend all that effort on selling a pair of shoes I make sure to sell then two pairs of spare shoelaces and a tin of polish, you can make as much on the extras as the shoes.

Aye thanks for the advice, cables and other low cost peripherals is where I can beat the big companies and still make a healthy profit on them. Im also hoping people will appreciate the genuine, expert advice they will receive enough to not mind paying a little more, rather than just going home and buying said laptop etc..off the internet.

 

[fairdealworld]

One thing to take into consideration is that nowadays there is a constant attempt to put fashion elements into quite ordinary things in order to increase sales. Thinking of scissors for example you see them with insets in the handles of various colours of plastic and so on. My point is that retailers may be cautious about buying just about anything or looking for a bigger margin to insure themselves against something which is still perfectly useful but no longer fashionable.

 

[harper101]

One thing to take into consideration is that nowadays there is a constant attempt to put fashion elements into quite ordinary things in order to increase sales. Thinking of scissors for example you see them with insets in the handles of various colours of plastic and so on. My point is that retailers may be cautious about buying just about anything or looking for a bigger margin to insure themselves against something which is still perfectly useful but no longer fashionable.

Yes, you're right.
Putting fashion elements into quite ordinary things is a common strategy to attract customer's attention, and eventually in increasing sales.

 

[Mayor]

if i am selling shoes online and through high street retailers what should i look to average my margins at? thanks

sorry, I don't follow this - do you sell shoes wholesale to retailers, and also sell direct to retail on-line ?

 

[kelvin1950]

if i am selling shoes online and through high street retailers what should i look to average my margins at? thanks

1. How much do you need to make?

2. How much do you want to make?

3. How much will the market bear?

We can't answer these questions for you.