or Connect
Styleforum › Forums › Men's Style › Classic Menswear › What happens to unsold items at a store?
New Posts  All Forums:Forum Nav:

# What happens to unsold items at a store? - Page 3

[quote]
Quote:
(imageWIS @ 22 Dec. 2004, 2:22)
Quote:
Originally Posted by maxnharry,22 Dec. 2004, 5:20
I'm not certain about how this works in retail speak, but the math is very plain... A \$1.00 item marked up 50% sells for \$1.50 A \$1.00 item marked up 100% sells for \$2.00 Ah, but apparently traditional math does not apply to retail...so the question is: what exactly is the correct calculation? Jon.
maxnharry's math is correct. Â I think what has thrown people off is confusing "markup" with "gross margin" Markup = The percentage of the cost of a product added to cost in order to arrive at a selling price. Â In other words, (selling price less cost) divided by cost Gross margin = The difference between net sales and cost of goods sold expressed as a percentage. Â  In other words, (selling price less the cost) divided by the selling price.
1) profit 2) margin 1) If you invest 1\$, and your profit is 50% that means you sell at 1.5\$ = 1\$ out of your pocket becomes 1.5\$ in you pocket. Profit = 0.5\$ 2) if you invest 1\$ and have a margin of 50% that means you sell at 2\$ or if you sell at 1.5\$ your margin is 33% = 1\$ sold makes 0.33\$, so when you sell 1.5\$ (invested 1\$) you have back in you pocket 0.33*1.5 = 0.5\$. Profit = 0.5\$
I understand everyone's confusion over markup. Â When I first started in the business out of college I had the same problems understanding "Retail Math". Â  But, I am also positive if you ask a retailer what his markup is on an item he bought at \$1 and sold at \$2 he will tell you it is 50%. Most people, and normal math calculations think of markup as the percantage an item is marked up from the purchase price. In retail speak they look at the percentage of the retail price that is markup. The formula for this calculation is:Â  Â  Â  Retail Price / (Retail Price - Wholesale Price)
Quote:
There is something I don't understand: If in retail-speak a 50% markup means that \$1 is sold for \$2 at retail, then what would a 100% markup be, if cost is \$1? Would it in fact a 100% markup of \$1 mean that the store sells it at \$4? Jon.
100% markup seems impossible if markup is for you = (selling price- cost price) / selling price
Ernest 100% markup is in fact impossible in retail math, unless you got the goods for free.
Quote:
I understand everyone's confusion over markup. Â When I first started in the business out of college I had the same problems understanding "Retail Math". Â  But, I am also positive if you ask a retailer what his markup is on an item he bought at \$1 and sold at \$2 he will tell you it is 50%. Most people, and normal math calculations think of markup as the percantage an item is marked up from the purchase price. In retail speak they look at the percentage of the retail price that is markup. The formula for this calculation is:Â  Â  Â  Retail Price / (Retail Price - Wholesale Price)
If you apply your formula you have no 50% = 2/ (2-1) = 2 = 200%
You have the formula backwards Selling Price / (Selling price - Cost)
Quote:
Ernest 100% markup is in fact impossible in retail math, unless you got the goods for free.
That's what I just said obove to WIS who was asking how much should be the selling price to have a makup of 100%
Ernest, that is in fact what you said, I thought you were still posing the question rather than answering it.
Quote:
You have the formula backwards Selling Price / (Selling price - Cost)
what does it change if you change retail by selling?
topcatney is correct in his explantions of "retail math". Retail math is different than what most of you know as traditional math. topcatney is also on the mark in his explanation of the private label policies of major retailers.
Quote:
topcatney is correct in his explantions of "retail math". Retail math is different than what most of you know as traditional math. topcatney is also on the mark in his explanation of the private label policies of major retailers.
This is the same math, but one must just know definition of each term. Profit Margin Markup
Ernest I am not sure I understand your question. I think I am answering what you are asking. Retail price and selling price are often interchangeable. Retail price usually refers to the price an item sold at retail, or the price the store sold it for, which is the same as the selling price.
Quote:
Ernest I am not sure I understand your question. Â I think I am answering what you are asking. Retail price and selling price are often interchangeable. Retail price usually refers to the price an item sold at retail, or the price the store sold it for, which is the same as the selling price.
I showed you what applying your formula you have 200% and you answered by changing the words, ratail by selling, anc cost by wholesale
If 100% markup is impossible then how come people I know in the management side of the retail trade always tell me about 100% markups? What are they talking about? (going on vacation today, so I can't ask them for 2 weeks, but I can access the forum, so I will post the question here). Jon.
Quote:
If 100% markup is impossible then how come people I know in the management side of the retail trade always tell me about 100% markups? What are they talking about? (going on vacation today, so I can't ask them for 2 weeks, but I can access the forum, so I will post the question here). Jon.
It is not possible if we use your definition when you said that a markup of 50% implies to sell a 2 It can be possible if you use what Â i said at the begining = bought 1 / sold 1.5 Â = 50% margin bought 1 / sold 2 Â  = 100% margin
New Posts  All Forums:Forum Nav:
Return Home
Back to Forum: Classic Menswear
• What happens to unsold items at a store?
Styleforum › Forums › Men's Style › Classic Menswear › What happens to unsold items at a store?