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Retail / Wholesale Supplies & Tips

Retail Supplies
Basic Retail Math

Retail and Wholesale Supplies

Products Offered
Fasteners for Retail
Cleveland, OH
Pegboard repair tabs, clip strips, vinyl pockets, magnetic strips
Insignia Systems
Plymouth, MN
Sign making machines, PC sign making software and custom card stock.
Merchandising Inventives Buffalo Grove, IL
Signage system, components for a point of purchase project, stock corrugation, literature holders, design & fulfillment services
Outwater Plastics
Woodridge, NJ
Architectural columns, moldings, display ticket molding, hard-to-find connectors.
Rose Displays
Salem, MA
Sign frames and base attachments, banner clamps for ceiling promotions.
Trion Industries
Wilkes-Barre, PA
Sign frames and base attachments, slat wall and pegboard accessories.

Basic Retail Math

Cost: The amount a retailer pays for a product that they intend to resell. This is the wholesale price.
Price: Selling price the retailer receives when they sell a product. This is the retail price.
Profit: The difference between cost and selling price.

Margin Formula: (Profit/Selling Price) X 100 = Margin. Margin is the profit expressed as a percentage of the selling price.

(Profit/Selling Price) X 100 = Margin
$2.00 (Selling Price) - $1.00 (Cost) = $1.00 (Profit)
$1.00 (Profit) / $2.00 (Selling Price) X 100 = 50% Margin
Multiplying the answer by 100 changes the figure to a percentage.

Mark Up Formula: (Profit/Cost) X 100 = Mark Up. Mark up is the profit expressed as a percentage of the cost.

(Profit/Cost) X 100 = Profit
$2.00 (Selling Price) - $1.00 (Cost) = $1.00 (Profit)
$1.00 (Profit) / $1.00 (Cost) X 100 = 100% Mark Up

When compared side by side, identical items that cost and are sold for the same amount, a mark up will show a larger number. This is because mark up factors in cost and margin factors in selling price.

Earns versus Turns: The amount a retailer makes on the number of units sold.

Space to Sales: The amount of shelf space an item receives is related to the item's total share of sales. If a product produces 10% of a retail sales, that item should have 10% of the retail space in the store.

More on Mark Up and Margin

Markup versus margin versus return, the basics of retail math can be confusing. Here's a quick study to help you understand the five principles of retailing arithmetic.

Markup versus Margin
If you mark something up 100% or have a yield of 50% margin the percentage is the same, with two different ways of looking at it. Markup works from cost by stating how much, by percentage, an item sells for above its cost. Markup is always the higher figure because it has a smaller base.  Margin works down from the selling price, stating what percent of the pie is left after cost is subtracted.

Basic Formulas
Markup = Profit / Cost. To compute markup, divide the profit by the cost. You buy a box of dog treats from your distributor for $5 and sell it for $9. To figure the markup, divide the profit of $4 ($9 retail price minus $5 cost) by the $5 cost. That gives you an 80% markup.

Margin = Profit / Retail Price To figure margin, divide the profit by the retail price. From the above example, the $4 profit divided by the $9 price equals a margin of 44%.

To help you visualize the Markup versus margin, here's a cheat sheet:

Comparing Markup and Margin

Discounting Rule
Sale Price = Margin minus percent of discount. For example 60% margin - 15% discount = 45% margin.

Turnover = Cost of Goods Sold / Average Inventory in a Year. For example your Cost of Goods Sold is $9000. Your starting inventory is $3300 and your ending inventory is $2900. That makes your turnover 2.9%. $9000 COGS / $3100 average inventory.

Retail Price Calculator Link. This will take you to another site.

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