How do you determine the RETAIL price of a product?

Question

Say I bought 50 soaps from the wholesaler for $10. Then how do I determione the selling price?? And don't say I can put MY OWN price.

No I can't .. in a way ..

I know in business you have to charge a certain percentage. And you can't over charge or under charge.

Answer 1

Generally you can charge what you want (of course you still need to sell it). There are some exceptions:

You can't gouge in times of crisis - gasoline and water during a weather crisis for examle.

There are some items where state laws determine the lowest price. You cannot charge less than cost for milk for example.

You can't false advertise. If you offer something at 1/2 off, you better have been trying to sell it at full price.

Lastly, certain companies have had fair trade agreements in the past, which again sets the lower (not upper) retail price.

The difference between the price you set and the price you bought is called gross margin. Stores will usually have a target for their mix, but the margin for each class item may differ. For example, grocery stores usually have a less than 10% gross margin for canned food items, but have an 80% gross margin on school supplies.

Convenience stores carry higher gross margins than grocery stores, because they do not have the volume. You pay for a quick check out, the location, and the ability to buy the item at a low price. This is why you pay more at convenience stores for the same item.

Now back to your soap. It is a commodity, so it will have a low margin, lets say 20%. That would make each bar 24 cents.

-Dio

Answer 2

In what country are you located that you HAVE to charge a certain percentage? None that I know of.

The answer to your question depends on where you sell your products and how high are your operating costs.

As a general rule, for retail stores (brick & mortar, not internet), the markup is is 200%. So if you paid $0.50 each, you would sell them for around $1.50 each.

If your overhead is less, figure on 100% markup, or sell soaps for $1.00

The price you charge should be based on a few things.
1. The price you paid.
2. The market you sell in
3. The prices your competition sells the same items for.

Good luck

Answer 3

Actually, it is back to basic demand and supply. Charge what you think people are willing to pay. And usually the better the packaging, the more you can charge. Some fastfood joints get 900% profit on their soft drinks.

Answer 4

..perhaps you could go to other retail store and try and find the same product and see what they are charging..