Mark-up

[glassman]

At what point does mark-up become excessive (beyond reason)?

We (my company) are negotiating a deal with a fleet company who have been paying one of competitors approximately: Item @ supplier list price + 450%.

What sort of margin is your industry driven by?

[Wacky Racer]

In the sports retail industry the standard mark up is 60%, but with clever buying (special offers) it can be well over 200%, but as the trade is so cut throat and competitive, with some items you are lucky to get 25%......

[timja]

Examples

New cars 15%
Electrical Appliances 30%
Clothing 50%
Trend Clothing 59%
Cosmetics/Fragrances 75-80%
Crystal Ware 60%
Gifts and clocks 55%
Food Retailers 45%


As stated though, with special offers etc. this can vary greatly (and obviously will depend on the particular sector)

Edited by timja on Thursday 29th March 22:58

[justinp1]

glassman said:

...At what point does mark-up become excessive (beyond reason)?...

The above is the most important point.

The only answer is when people stop paying it!

[timja]

justinp1 said:

glassman said:

...At what point does mark-up become excessive (beyond reason)?...

The above is the most important point.

The only answer is when people stop paying it!

Exactly! - Really depends on the item though, many customers may have no idea how much things cost to produce inparticular in bulk! - I'm sure many FMCG's arriving in containers from overseas have huge markups. I know one company for example that sourced some fleeces from china that previously were made in UK - Cost them £4 each delivered, sold them for £20!!

[muppetdave]

I know my mum's company selling posh gifts/home furnishings etc, mark up at approx 180%!!! (that I believe is on most products). That said they are only stores and pitch on a boutique basis - basically working on the basis it is excessive when people stop paying - except that they are targetting those who are trying to keep up with the joneses.

[justinp1]

muppetdave said:

I know my mum's company selling posh gifts/home furnishings etc, mark up at approx 180%!!! (that I believe is on most products). That said they are only stores and pitch on a boutique basis - basically working on the basis it is excessive when people stop paying - except that they are targetting those who are trying to keep up with the joneses.

Exactly.

What is the intrinsic value of a Sainsburies dinner set, and what is their mark up?

What is the intrinsic value of a Gold rimmed Versace dinner set, and what is their mark up?

The only factor is what people are prepared to pay!

My companies markup factor is between 1500 and 2500%

I *could* charge a cheaper price, but I am not a charity - I am a businessman and we have a free market!

[arfur]

The standard and accepted markup in the retail clothing industry is 265% of the ex-vat purchase price. The end figure includes the sales vat

Mind you ... think the other half has got away with over 1000% in the past .. because of reverse snobbery ... ie it's too cheap !!

arf

[V8 EOL]

I think it depends on what you are selling and the value of the product, market you are in and the volume you are shifting.

We sell software, our gross margin is healthy (more than 10% and less than 50%), our orders range from £20k to £500k and we aim for orders 10 a year.

Selling penny chews at 500% margin is a different ball game altogether.

Swings and roundabouts.

[rsvmilly]

In the building industry, overall profit of 5 to 7.5% is the norm.

[voyds9]

Mark up bears little relationship to net profit.
My industry mark up upto 700%,(generally gross profit 75%), net profit 8-10%, we are a people heavy industry.

[mcflurry]

If I am buying a product my preferred margin is as close to zero as possible, if selling then as high as possible

And the service to back it up is nice too

[khushy]

rsvmilly said:

In the building industry, overall profit of 5 to 7.5% is the norm.

LOL - not in this country - more like 1% - 3 % and thats if things go smoothly.

Khushy