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How to calculate trade mark-up


How to calculate trade mark-up</a>

The question of setting a price for a particular product or service excruciates almost every entrepreneur.

Its level should ensure the maximum profits of business, without leading to a significant drop in demand.



Determine the amount of costs that are required toPurchase or production of the goods sold. Do not forget to add to this amount fixed costs: the cost of renting a room and fixed utility bills, the salary of employees involved in the production and sale of products, advertising, etc.


If you know the amount of costs that goes intoProduction or sale of one unit of goods, then you can calculate the amount of sales that is necessary in order to buy constant costs. When calculating, do not forget that the sales market may have its limitations, so you may not always be able to sell the quantity of products that are conceived at a certain level of the premium.


Different groups of goods can have differentSurcharge level. So, high-quality, exclusive, rarely purchased by customers, goods usually have a large surcharge. The surcharge on products, consumer goods should not be high.


When setting prices, you need to orient yourself and your competitors. To sell more, make Extra charge Somewhat lower. But do not get too involved, because the psychology of consumers can play with you a cruel joke, since they will stop buying your products, linking its low price with low quality.


The size of discounts for regular customers and the costs of holding various promotions and rallies should also be included in the Extra charge On goods. Also it is necessary to make also payers of the tax which is calculated depending on volume of turns.

How to calculate trade mark-up Was last modified: June 20th, 2017 By Ryfbeikg
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