Retail Business Tips : Retail Business: Pricing Crafts

I’m Mike Campbell, with Doggie Styles, in
Beverly Hills, California, and I’d like to talk a little bit about how to price crafts.
A lot of the merchandise that we have, comes from very small vendors. These are all handmade
items, handmade little dresses, and different things for the dogs, handmade beds, etc. I
guess these could be considered crafts. Generally, the most important thing, is for the vendor
to understand how to price their own product, what they’re making. They need to make a profit
on that. For most retailers, it’s very easy. The standard markup, is called Keystone Markup,
and that’s just doubling the wholesale price, so if somebody comes to me and they have a
product that I want to carry in the store, and the wholesale price of that product is
five dollars, I’ll sell it for ten dollars. Out of that ten dollars, it’s not all profit.
Obviously, it goes to my overhead. It goes to my sales costs, etc, so my profit may actually
only be one or two dollars, but that’s the easiest way to mark things up. Now, sometimes
you’ll have products that the vendor will come in, and it’s something that really is
spectacular, and maybe they’re happy with a smaller profit on that, which allows me
to mark things up a little bit more. There are other items, like food items, which are
generally marked up much less, but the average markup is a one hundred percent markup, Keystone
Markup. Five dollars is placed on the floor, for sale and retail, at ten dollars. I’m Mike
Campbell, with Doggie Styles.

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