What's The Best Retail Mark-Up ?
We have been receiving quite some enquiries regarding the re-sell value of our products. We would like to share some of our thoughts and experience with you.
Our general reply is the mark-up could be at least 5-7 times. However, it is very dangerous to just follow this figure. What makes you think you can mark it up by 5x, but not 10x or 2x ? We have one chain store retail our products at 8x - 12x, and another individual resells at 2-4x on eBay. Why ?
Few friends of mine think we can earn the most if we sell in retail as we are the manufacturer, however, this assumption is absolutely wrong as doing retail is not just a manipulation of the calculator by multiplying the cost of the item by 2,3,4......
Some customers like to do shopping in a very disciplined way, start at 10A.M., get the shopping list done in a hour and then retreats at 11Am. However, majority like to do the shopping in a very leisure way. They like to browse, to chat, to listen, to ask, to try the item say, earrings, to see if they match their hairstyle, to seek advice from their friends, and in most cases, from you. You are not just the seller but also the consultant of your customers.
Gift wrapping is common, but will you offer postal services if your customers buy the gift for his/her family overseas ? E-cards seems getting the way, but have you thought of going back to the old days , suggesting your customers to write on the gift card you provide and post for them to the ones they love ? I don't know if helps or not ? But we all know it is the good shopping experience that keep your repeating customers, and it is your services that give your customer good experience.
Hence, the retail value of any piece of item is not only about the quality of the product, but also the services you can offer, and also a bunches of determinants like :
- the location of your store
- the decoration and layout of your store
- the way you display your goods, is it eye-catching ?
and other factors that I believe you should know better than me.
Retail mark up is not the unscrupulous profit that some people deliberately like to call it, but is the amount of money that customers are willing to pay for the premium services that some sellers do not care or do not have the expertise to offer.
Any comments ?
Good business to you all !
Austin Zilo
TFDirect
Our general reply is the mark-up could be at least 5-7 times. However, it is very dangerous to just follow this figure. What makes you think you can mark it up by 5x, but not 10x or 2x ? We have one chain store retail our products at 8x - 12x, and another individual resells at 2-4x on eBay. Why ?
Few friends of mine think we can earn the most if we sell in retail as we are the manufacturer, however, this assumption is absolutely wrong as doing retail is not just a manipulation of the calculator by multiplying the cost of the item by 2,3,4......
Some customers like to do shopping in a very disciplined way, start at 10A.M., get the shopping list done in a hour and then retreats at 11Am. However, majority like to do the shopping in a very leisure way. They like to browse, to chat, to listen, to ask, to try the item say, earrings, to see if they match their hairstyle, to seek advice from their friends, and in most cases, from you. You are not just the seller but also the consultant of your customers.
Gift wrapping is common, but will you offer postal services if your customers buy the gift for his/her family overseas ? E-cards seems getting the way, but have you thought of going back to the old days , suggesting your customers to write on the gift card you provide and post for them to the ones they love ? I don't know if helps or not ? But we all know it is the good shopping experience that keep your repeating customers, and it is your services that give your customer good experience.
Hence, the retail value of any piece of item is not only about the quality of the product, but also the services you can offer, and also a bunches of determinants like :
- the location of your store
- the decoration and layout of your store
- the way you display your goods, is it eye-catching ?
and other factors that I believe you should know better than me.
Retail mark up is not the unscrupulous profit that some people deliberately like to call it, but is the amount of money that customers are willing to pay for the premium services that some sellers do not care or do not have the expertise to offer.
Any comments ?
Good business to you all !
Austin Zilo
TFDirect
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11:26 AM
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