754, RE: Pricing Posted by Phanntom, Sat Jun-16-07 06:08 AM
Sorry I took so long...I missed your last question.
When you keystone that becomes your retail price.
Example:
If an item costs you $50 and you keystone it (or mark it up 100%) your retail price will be $100. This gives you a 50% Gross Profit Margin.
Now depending on how much you want to provide another retailer for a profit margin you'll offer a discount, say 40%. That means you're wholesale customer will pay $60 for it. If they use your MSRP they'll make 40% GP and you'll be making 20% GP.
I know if your new to this it can be confusing, especially since people always confuse markup and margin...biiiig difference. To show you how confusing it can be: If I'm offering to sell you a product with a MSRP of $100. I can tell you I'll give you discounts of 34%-25% and 10% and this will be your cost. Or I can offer it to you as discounts of 50%, 10% and 10%, or 50%, 5%, and 5%. They're all the same. Each industry has it's own way of expressing things. I hope this helps more than confuses.
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