Retail Markup?
New business, (2) questions.
1. What should a sellers markup percentage be on trendy costume jewelry with free shipping and handling? Items wholesale from $1.00 – $30.00
2. Also what percentage should it be if my inventory is coming from overseas? Serious answers plz.
Your questions seem to indicate that you will be selling on the web to retail customers. Pricing is challenging, sell too cheap and you may not make enough money to cover expenses. Sell too high and someone else will likely copy your good idea and sell for less.
A typical jewelry store has to have an expensive location and their margins may run from 100-500% or more depending on the product lines and location.
Your web business has lower overhead and products should be priced lower price than the same item in a retail store. If your prices are too low however, customers won’t believe that they are getting quality products from you.
Make sure you have a firm grasp on your landed costs at your place of business!
I would compare your products at competitors stores and websites. Aim to set your selling prices within 10-15% of their prices – but work from your landed costs and overhead costs!!!!!
Using a percentage alone does not reflect the changing pricing that may be available from competitors.
Shipping via USPS should typically be $5.00 or thereabouts for priority mail. Carry in a couple typical shipments all packaged up and have the postmaster calculate the fees. (Don’t forget insurance and signature required delivery services)
Here’s how I would calculate selling prices:
Local retail store – necklace (same as mine) for sale at $150
My landed costs = $40 plus shipping of $6 or total costs without overhead and labor of $46. (Make sure to add in your desired hourly rate divided by number of minutes to prepare an order and also add in your payment processing fees.) I would estimate these to be $5 labor, and $3 payment processing. Total variable costs are now $54.
Selling price = $54 * 200% = $108. (I used 200% as a markup suggestion. If you were marking up 225% (2.25) your price would be $121.50.
As a niche web retailer of jewelry, your volume may vary greatly and I think that higher margins will help your business become worthwhile.
Good Luck!!
costume jewellery wholesale
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