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  1. #1
    Join Date
    Feb 2005
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    Is retail vs wholesale a scam? Who sets the price?

    What is a fair mark up from wholesale to retail? Who sets the price? What do they base the figures off of?

    What is fair market value?

  2. #2
    Join Date
    Dec 2013
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    67

    Re: Is retail vs wholesale a scam? Who sets the price?

    I've always been told that if you are going to sell products, you need to mark everything up 300%. Part of that is profit, part is to cover the cost of the item and the other is to cover the cost to replace it (or maybe it was for the labor, I don't recall).

    You also have to consider, retailers need to offset costs of stolen or damaged merchandise as well.

  3. #3
    Join Date
    Jul 2005
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    Re: Is retail vs wholesale a scam? Who sets the price?

    I've always used the 4x rule. Whatever the cost is multiply it by 4 to get your retail price. This is to cover cost of merchandise and total operating overhead (utilities, wages, rent/mortgage payment if you own your store, taxes, maintenance costs and so on...). You'd be surprised at how little actual profit a small business owner actually makes.

  4. #4
    Join Date
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    Re: Is retail vs wholesale a scam? Who sets the price?

    I would say fair is a 35% to 45% markup

  5. #5
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    Re: Is retail vs wholesale a scam? Who sets the price?

    Quote Originally Posted by Administrator View Post
    I would say fair is a 35% to 45% markup
    Only if you have 0.0% overhead.

    Stop and think... if you have a 'brick & mortar' store your daily overhead would be rent or mortgage, utilities, insurance, furnishings (display cases, etc...), wages (if you have employees), office expenses. Not to mention state property taxes and fees. These costs go on whether you have a good sales day or not... and I didn't even cover all the fees and expenses incurred running a business. Do you honestly believe you will be able to turn a profit (pay yourself after expenses) if you are only charging a 35% to 45% markup?
    Let me know when your business goes up for auction.

  6. #6
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    Re: Is retail vs wholesale a scam? Who sets the price?

    I think 35 to 100% markup.

    • You have a lease/mortage/rent on location.
    • Employees
    • Taxes
    • Salaries
    • Other incidentals like shipping

    Then you must make a profit.


    That's why online has killed retail. You can buy directly or semi-directly

  7. #7
    Join Date
    Jul 2005
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    6,549

    Re: Is retail vs wholesale a scam? Who sets the price?

    Quote Originally Posted by Administrator View Post
    I think 35 to 100% markup.
    • You have a lease/mortage/rent on location.
    • Employees
    • Taxes
    • Salaries
    • Other incidentals like shipping

    Then you must make a profit.


    That's why online has killed retail. You can buy directly or semi-directly
    The most successful retailers have 'brick & mortar' outlets plus online capability. Online only, if you're successful (Amazon for example) have all the headaches of any other retailer... warehousing, fulfillment, shipping, employees, taxes, state fees... all of it. I can guarantee that they are charging a lot more than 100% markup. They're doing the 4x markup... at least.

    Online hasn't killed retail... it has done the exact opposite... it is causing retail to grow.

  8. #8
    Join Date
    Mar 2006
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    NeverSayNeverLand
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    330

    Re: Is retail vs wholesale a scam? Who sets the price?

    Too many variables define one product cost to another, so there is no solid rule, it all comes down to your cost verses selling price, you may have low overhead, or high with need to advertise heavily, so just too many variables. Take clothing, if it is manufactured in China Malaysia versese the same clothes made in U.S., mark ups are generally the same, but profits are much higher for the lower cost to manufacture clothing. There was always a high mark up on clothing, but you look at industry now, no one pays retail M.S.R.P any longer.

  9. #9
    Join Date
    Aug 2016
    Posts
    25

    Re: Is retail vs wholesale a scam? Who sets the price?

    I think there are 50% margin in the cost and retail price. if cost is 100$ then sale price would be 200$ including all taxes.

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