Post on 13-Dec-2014
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Retail Price and MarkupRetail Price $125
Cost of Merchandise $75
Margin $50
Markup as a Percent of Retail Price 40% = $50/$125
Retail Price = cost + markup
Setting Retail PricesRetail Price and Markup
Retail price = Cost of merchandise + Markup
Markup is the difference between retail price and cost of the item.
Markup percentage = Retail price – Cost of merchandise
Retail price
Retail Price = Cost of Merchandise 1 – Markup percentage (as
a fraction)Key-stoning – a 50% markup typically used by
apparel retailers
MarkupsReductions – factors that reduce the actual
selling price from the initial sales priceInitial Markup – retail selling price initially
set for the merchandise minus the cost of merchandise
Maintained Markup – the actual sales realized for the merchandise minus its cost
Initial Markup =percentage
Maintained markup percentage + Percent reductions100% + Percent reductions
Initial and Maintained Markups
Initial Retail Price $1.00
Cost of Merchandise $.60
Maintained Markup $.30
Maintained Markup as a Percent of Retail Price 30% = $.30/$1.00
Reductions $.10