LBS Markup
- Thread starter Konabumm
- Start date
Standard markup for all retail is 220% that means an item costing a dollar sells for 2.20... Some items are adjusted lower, some higher. Not just bike shops, but everyone where does that
Your math needs an adjustment.DirtyMike said:
220% markup on a $1 item would make that item cost $3.20. You forgot to add the markup to the cost.
What particular form of retail are you talking about? I would like to work in it at that rate.
My math is perfect, that is if you understand how to use percentages.
1x220%=220
another way to look at it 1x2.20= still equals 2.20
And thats all retail, bike shop, Automotive, grocery store doesnt matter, thats just how people make money. Shops, automotive or bike, dont make much money from labor, Labor pays your guys doing the work, the shops themselves get tehr money from parts. But like i said, its not always exactly the same rate, a new bike for example has a reltivly low markup, as do tires in teh automotive. Tires in automotive are generally marked up 125%. Meaning if i pay 100 your paying 125. Where as if i sell you a fuel pump chances are your paying 200% of what i pay, meaning double. Now look at Inner tubes for Bikes, usually bought for a dollar each and solg for four to five dollars each... Big markup there. Wanna see a killer markup, call up Burger king, will take alot of time on phone, but eventually youll find out how much they say a whopper costs to make.
Just curious, how did you get 3.20 from that??? you sure its my math that needs help??? Maybe try a business class that talks about how to figure markup.
Another word youll hear alot in retail is Keystone, Thats a simple double your money markup, so if your buying something for 100 dollars and youhear they keystoned it, that means they spent fifty.
Please dont think i am trying to be an asshat, or a know it all, just i have dealt with alot of retail, and taken more than my share on Pricing, selling, all that jazz. Business math shows that 100% markup means you sell at cost, 200% is double and so forth. And thats were most get teh average of 220% to not only keystone tehre markup, but to cover any shipping and such involved with getting the product in the first place
1x220%=220
another way to look at it 1x2.20= still equals 2.20
And thats all retail, bike shop, Automotive, grocery store doesnt matter, thats just how people make money. Shops, automotive or bike, dont make much money from labor, Labor pays your guys doing the work, the shops themselves get tehr money from parts. But like i said, its not always exactly the same rate, a new bike for example has a reltivly low markup, as do tires in teh automotive. Tires in automotive are generally marked up 125%. Meaning if i pay 100 your paying 125. Where as if i sell you a fuel pump chances are your paying 200% of what i pay, meaning double. Now look at Inner tubes for Bikes, usually bought for a dollar each and solg for four to five dollars each... Big markup there. Wanna see a killer markup, call up Burger king, will take alot of time on phone, but eventually youll find out how much they say a whopper costs to make.
Just curious, how did you get 3.20 from that??? you sure its my math that needs help??? Maybe try a business class that talks about how to figure markup.
Another word youll hear alot in retail is Keystone, Thats a simple double your money markup, so if your buying something for 100 dollars and youhear they keystoned it, that means they spent fifty.
Please dont think i am trying to be an asshat, or a know it all, just i have dealt with alot of retail, and taken more than my share on Pricing, selling, all that jazz. Business math shows that 100% markup means you sell at cost, 200% is double and so forth. And thats were most get teh average of 220% to not only keystone tehre markup, but to cover any shipping and such involved with getting the product in the first place
Got a feeling that when i said retail in first post i was Misunderstood, i wasnt using the word there to talk about cost, i was using it to discuss the retail industry, 220% is an average, and what alot of people use to base cost to also cover shipping.
Two easy ways, gonna make up a wholesale number 47.15
1st) 47.15x2.20=103.73
2nd) 47.15x20%=9.43 then 47.15x200%=94.30 Add together to get 103.73
Means double your money, plus 20% either way
Two easy ways, gonna make up a wholesale number 47.15
1st) 47.15x2.20=103.73
2nd) 47.15x20%=9.43 then 47.15x200%=94.30 Add together to get 103.73
Means double your money, plus 20% either way
My bad on the wording, i have a tendancy to talk/type in a way i understand that sometimes isnt really clear when you read/hear
Let say your markup is 100% and the item cost a dollar. Your math is the item retails for $1.50.DirtyMike said:
I still barely understand markup formulas, so I always look at the Wiki page before pricing: http://en.wikipedia.org/wiki/Markup_(business)
(Original * Markup) + Original = Total
A 100% markup is a $2 item, and 220% markup is $3.20.
BTW, if you have access to bike wholesale pricing, take a look at their markup and retail pricing...
most confusing part abut figuring mark up percentages, is that most people overthink it. There are more than a few ways of doing the math, and one thing that confuses people is that they think of it differntly than who wrote it.And yes i do have access to wholesale bikes pricing, weekend job is working at teh LBS, reg job is automotive, i price and markup items everyday. The easiest way to get your number your looking for is like this, and i am using 220% for the example again
2 dolar item
2x2.20=price4.40
Now with your equation you have
(2x120)+200=4.40
Little differnt math, easier to understand, same outcome. Second equation just breaks it down more, used more for showing people where profit is comeing from rather than figuring pricing
I see the markup on a bunch of different levels, 220% is an average that i got out of one of my textbooks still sitting in teh garage.
2 dolar item
2x2.20=price4.40
Now with your equation you have
(2x120)+200=4.40
Little differnt math, easier to understand, same outcome. Second equation just breaks it down more, used more for showing people where profit is comeing from rather than figuring pricing
I see the markup on a bunch of different levels, 220% is an average that i got out of one of my textbooks still sitting in teh garage.
Beating a dead horse by now i am sure, but gonna do the math a few times with different percentages using both methods and list them out.
To keep simple will start each one with Base price of five dollars
1) 220% on five dollar cost
5x2.20=11 dollars
(5x120%=6)+5=11
2) 410%on five dollars
5x4.10=20.50
(5x3.10%=15.5)+5=20.50
3) 16.11 percent on five dollars
5x16.11=80.55
(5x15.11%=75.55)+5=80.55
4) 8.7 percent of 5 dollars
5x8.7=43.50
(5x7.7%=38.50)+5=43.50
Two different ways, to get the same answer. Use the first one to get your pricing quick, seond one to figure exactly were your profits are coming from. Fun math there dividing up your profits and how your getting them and finding your margins and stuff!!! Thats my normal day though
To keep simple will start each one with Base price of five dollars
1) 220% on five dollar cost
5x2.20=11 dollars
(5x120%=6)+5=11
2) 410%on five dollars
5x4.10=20.50
(5x3.10%=15.5)+5=20.50
3) 16.11 percent on five dollars
5x16.11=80.55
(5x15.11%=75.55)+5=80.55
4) 8.7 percent of 5 dollars
5x8.7=43.50
(5x7.7%=38.50)+5=43.50
Two different ways, to get the same answer. Use the first one to get your pricing quick, seond one to figure exactly were your profits are coming from. Fun math there dividing up your profits and how your getting them and finding your margins and stuff!!! Thats my normal day though
I can give another viewpoint about retail pricing and mark-ups.
I used to be the manager of a small comic book store. At the time, my store was one of 4 in a small chain between NJ and PA. There is one major distributor for comic books: Diamond. They have exclusive distribution rights for a number of comic book publishers including DC (Superman, Batman, etc) and Marvel (X-men, Spiderman, etc) as well as most of the minor companies (Dark Horse, Image).
I can tell you this much: the margin on comics is brutal. Take your average $2.25 comic. The store selling it gets a discount of between 30% to 45% off the cover price. So at best, we paid around $1.46 for that book. At worst: $1.57. The discount varies depending on how much you buy. On some items such as toys and soft-goods, the discount is fixed (usually 35%).
New books ship on Tues and go on the shelf on Weds. That Weds was our make or break day. A good day as when gross sales figures were greater than the order invoice for that week. The sales for the other 6 days went towards the store rent, utilities and staff salaries. If we were lucky, we'd have a good Thurs (say 60% of Weds sales) and the owner would be happy.
The owners of the stores are NOT driving fancy cars... and would be really screwed if their wives didn't work as well...
I used to be the manager of a small comic book store. At the time, my store was one of 4 in a small chain between NJ and PA. There is one major distributor for comic books: Diamond. They have exclusive distribution rights for a number of comic book publishers including DC (Superman, Batman, etc) and Marvel (X-men, Spiderman, etc) as well as most of the minor companies (Dark Horse, Image).
I can tell you this much: the margin on comics is brutal. Take your average $2.25 comic. The store selling it gets a discount of between 30% to 45% off the cover price. So at best, we paid around $1.46 for that book. At worst: $1.57. The discount varies depending on how much you buy. On some items such as toys and soft-goods, the discount is fixed (usually 35%).
New books ship on Tues and go on the shelf on Weds. That Weds was our make or break day. A good day as when gross sales figures were greater than the order invoice for that week. The sales for the other 6 days went towards the store rent, utilities and staff salaries. If we were lucky, we'd have a good Thurs (say 60% of Weds sales) and the owner would be happy.
The owners of the stores are NOT driving fancy cars... and would be really screwed if their wives didn't work as well...
People who collect comic books have wives?Ian F said:
My LBS is cool :love:
Oddly, most of the people who own & work in the stores stop reading comics...BurlyShirley said:
But yes, the majority of customers I had were married. Just as there are make geeks, there are female geeks... and they tend to get married...
I'm telling you, if you go into any bike shop and ask them to mark up an item 100% percent, every sales manager will be doubling the wholesale price, not using your formula.DirtyMike said:
BTW, the markup formula I supplied this is how bicycles are priced for retail.
My shop just does a 40% margin over catalogue prices. Pretty simple, pretty competetive.
Since i don't feel the horse is dead enough, i pick on this particular stupid point:
Defining the USE of the term Markup.
We've seen several different USES of it. That is, Definition is Variable.
I'm not an English teacher and don't care enough about to it reference a dozen different books.
I started working in Retail in 1978. I stopped utterly in 2001. Taking time out for meals and sex, that's about 23 years.
Bike shops from 1984 to 2001 specifically.
7 different bike shops, mechanic to GM.
the term MARKUP was used unanimously to refer to the percentage increase ADDED to COST.
While you are no doubt much better educated than most of us Bike Shop Monkeys, it's not a question of Higher Level Accountancy Mathematics.
Hit us with the Wisdom Stick and we'll stay out of these threads and not post anything ever again about LBS's.
Hit us with it twice and we might stop calling any fork 'Triple Crown'. [which is a horse racing term, btw]
Defining the USE of the term Markup.
We've seen several different USES of it. That is, Definition is Variable.
I'm not an English teacher and don't care enough about to it reference a dozen different books.
I started working in Retail in 1978. I stopped utterly in 2001. Taking time out for meals and sex, that's about 23 years.
Bike shops from 1984 to 2001 specifically.
7 different bike shops, mechanic to GM.
the term MARKUP was used unanimously to refer to the percentage increase ADDED to COST.
While you are no doubt much better educated than most of us Bike Shop Monkeys, it's not a question of Higher Level Accountancy Mathematics.
Hit us with the Wisdom Stick and we'll stay out of these threads and not post anything ever again about LBS's.
Hit us with it twice and we might stop calling any fork 'Triple Crown'. [which is a horse racing term, btw]
So shops might...if they don't have to put the stuff on sale, make 40-50% margin on stuff, but by the time the bills are all paid for rent, help and misc. junk, bike shops don't make too many people rich. It's the reason indie shops are starting to die out in favor of corporate chains with Slightly less overhead and more buying power; but generally less emphasis on great service.
So are you willing to pay for knowledge?
So are you willing to pay for knowledge?