Thread: Selling Merch Mark-Up?

I'm ordering lots of things online for my students and selling to them at the studio. I'm wondering what (if anything) is your mark-up rate?

I had a teacher who used to mark up everything 500% and that always felt horrible to me. I would never do something like that but I struggle with charging the girls extra (but I do have extra costs including sending money home to pay for everything and I think that I should be reimbursed a little for all the time it takes to find everything and order it-am I wrong?)

Okay don't feel bad because everything you buy is marked up from milk,clothes food etc. Do you buy at wholesale or at retail prices online?
I work in a store if you knew how
much we mark up the luggage you'd be shocked(yes some luggage I sell costs as much as a bella and like a bella customers do buy them)
If i want to order it direct from the manfucaturer I pay at least 50-60% less I get it at cost. or at the wholesale price
Let me give you an example.
If you are buying hip scarves a lets say $10.00 a piece and you buy 10 Its $100.00 plus lets say 8.00 s&h. You can go ahead and sell them to your students for $20.00-$25.00 (Its a 50% mark up)you got to make some of the money back for the effort of ordering and getting it shipped. and its called making a profit never feel guilty of making extra cash in this economy.
Never mark it up more than 60% if you paid wholesale of what you paid for it. If you paid retail for it then mark it up about 10% because the retail price is the markup already.
You want to be fair and reasonable. And there will be always a student who will think your price is to expensive. For that have some high end,mid range and low end pricing depending on original cost to you. You don't have to mark it up 500%. 50-60% is more reasonable
I hope I made sense Good luck

Alrana

I agree. Normal markup from wholesale prices is 50%.

Originally Posted by mehndidancer

Okay don't feel bad because everything you buy is marked up from milk,clothes food etc. Do you buy at wholesale or at retail prices online?
I work in a store if you knew how
much we mark up the luggage you'd be shocked(yes some luggage I sell costs as much as a bella and like a bella customers do buy them)
If i want to order it direct from the manfucaturer I pay at least 50-60% less I get it at cost. or at the wholesale price
Let me give you an example.
If you are buying hip scarves a lets say $10.00 a piece and you buy 10 Its $100.00 plus lets say 8.00 s&h. You can go ahead and sell them to your students for $20.00-$25.00 (Its a 50% mark up)you got to make some of the money back for the effort of ordering and getting it shipped. and its called making a profit never feel guilty of making extra cash in this economy.
Never mark it up more than 60% if you paid wholesale of what you paid for it. If you paid retail for it then mark it up about 10% because the retail price is the markup already.
You want to be fair and reasonable. And there will be always a student who will think your price is to expensive. For that have some high end,mid range and low end pricing depending on original cost to you. You don't have to mark it up 500%. 50-60% is more reasonable
I hope I made sense Good luck

Alrana

Thank you. That was really helpful. And actually it's almost exactly what I was doing.

So far they've all been ok with everything

You definitely have to mark things up, otherwise you're losing money. You're tying up cash that could be earning interest somewhere, you're spending your time finding decent wholesalers and putting together orders, and you'll undoubtedly never be able to sell everything you buy, either because it arrives damaged (hipscarves with loose coins), no one likes it, or things just disappear/walk off.

Retail markups are typically closer to 100% (double the wholesale price, as in the example above, is a 100% markup, not 50%), higher for a very small boutique where the merchandise won't turn over quickly. I totally agree that 500% seems like highway robbery.

I always strive to be able to offer lower prices than my students would have to pay if they were buying retail, but I allow myself a small profit, too. Except in situations where we're doing a group buy for troupe costumes, then we all order together and there's no markup.

Normal mark-up in australia is at least 110% (10% for GST) and most fashion items are marked up by 200% and more.
I work in the industry and its sadly true.

I think you have more room for markup if you are buying huge quantities for a department store etc.. than if you are buying small quantities for a studio store. You get a bigger discount if you buy more.
Also, You have to be careful not to mark it up too much because I usually look online to see how much things are going for before I buy something. If the studio price is too high, then I'm not gonna buy anything.

I keep my studio prices lower than most retailers, but I do tell my students they can sometimes find lower prices on e-bay if they wish.

Honestly, even at 100% markup I don't make anything. I pay sales tax out of that, plus my regular 25% self-employment tax, there are at least a couple of scarves I have to toss or clearance out for $5 out of every 20 I order, etc.

And I'm not even paying for a pricey retail space or employees! I don't know how little mall stores survive, I really don't.

Originally Posted by Lauren_

I keep my studio prices lower than most retailers, but I do tell my students they can sometimes find lower prices on e-bay if they wish.

I sell hip scarves, veils, zills and Michelle Joyce's DVDs in my classes.

I really sell the merchandise more as a convenience for my students as opposed to a way to make a lot of extra cash. I think last year I made about $200 profit, tops, on everything I sold.

I'm extremely lucky, though, that the person I get my hip scarves and veils from does not require me to pay up front for the merchandise - I just send her a check once a month or so for the wholesale cost of what I do sell, and the rest is mine to keep.

I believe Dahlal has a teacher's vending program too where you don't have to lay out any cash upfront. They send you stuff, and when you sell it and send the money to them, they pay you a commission on it.

~oops. I meant 100% markup. I was thinking double the price but put 50% for some reason.

It's more than a simple formula, it depends also on what is the fair retail price of the items you are selling. I don't believe in ripping off your students, it should be about providing them with the materials they need at a competitive price. Students can buy items themselves from the internet so if you want to compete with that then you need to make it worth it to them. And please people do not sell them cheap quality items, you are not doing them any favors! They won't respect you if you sell them a cheap hip scarf but then it falls apart a couple of months later. I have also seen some teachers sell their items at such high prices that once the students figure it out they go take from someone else as well as buy from someone else.

I double the price, or go a little less. I get things wholesale, and I usually will just sell them for what they retail for directly from that merchant. So, students are still saving money even if they buy it for the retail price from me because they don't have to pay shipping.

Originally Posted by bellydancewear

It's more than a simple formula, it depends also on what is the fair retail price of the items you are selling. I don't believe in ripping off your students, it should be about providing them with the materials they need at a competitive price. Students can buy items themselves from the internet so if you want to compete with that then you need to make it worth it to them. And please people do not sell them cheap quality items, you are not doing them any favors! They won't respect you if you sell them a cheap hip scarf but then it falls apart a couple of months later. I have also seen some teachers sell their items at such high prices that once the students figure it out they go take from someone else as well as buy from someone else.

They get everything from me for cheaper than they would pay on their own. I'm not making very much money at all from this, but I think it's fair to take a little for the time and extra costs (like transfering money home and currency exchanges).

another thing to consider - they are paying for the "convenience" of having the ability to buy it right there. Sure - they may be able to buy it on line cheaper but that have no idea about the quality, vendor, etc. You pay for convenience sometimes.

Yes. And you pay to have someone else do the legwork, the shopping, figure out the international payments and shipping options, etc. Lots of my students don't WANT to do any of that, or risk getting a crappy piece of merchandise when it arrives.

I think it's funny that we (including me) feel the need to stress that we're not really *gasp* making any money.

When I was a student, I never begrudged my teachers making any money. I hoped they were making enough so they'd continue to teach! (vend, sponsor events, etc). I wouldn't want to be ripped off, of course, but I never minded thinking my teachers were making a profit.

Originally Posted by Lauren_

I think it's funny that we (including me) feel the need to stress that we're not really *gasp* making any money.

When I read eshe's OP, and Lauren's response, I had to smile a little.

We have got to get over this notion that everything BD has to be out of the goodness of our hearts.

I have a non-wholesale source for hip scarves where I pay $20 each. Since the going retail price for these wraps is $35, I'm not about to mark them up 100%, because then they'd be overpriced. Instead, I charge $30, which is a margin of 67%. I still make a little on each scarf but I'm able to tell my students with confidence that because I'm able to get a bit of a deal from my source, I'm able to pass my savings to them and they pay a bit less than they might otherwise.

Regardless of what business I had, I'd never gouge my customers, but I don't think I'm immoral for compensating myself for the time, risk and just-plain-pain-in-the-neck stuff that goes with having a stock of goodies for sale.

So, sell on, everybody!

Deborah

YES, Deborah. I believe in my head that it's OK to earn a living at something I love. But I'm crazy about my students, many of them have become good friends over the years. It's hard to get used to the idea that it's OK to make a profit on my dealings with them, as long as I'm also offering them a great deal.

Hip scarves in my studio are also $30, and they're excellent quality. DVDs I produce are $10. CDs are $15. I think those are very reasonable prices.

Originally Posted by Lauren_

YES, Deborah. I believe in my head that it's OK to earn a living at something I love. But I'm crazy about my students, many of them have become good friends over the years. It's hard to get used to the idea that it's OK to make a profit on my dealings with them, as long as I'm also offering them a great deal.

Hip scarves in my studio are also $30, and they're excellent quality. DVDs I produce are $10. CDs are $15. I think those are very reasonable prices.

Very reasonable!

You're also providing a service, so students don't have to go out and search out this stuff for themselves. Great if they want to, of course, but as long as our pricing is in line with what students would pay elsewhere, it's all good!

That trust issue . . . it's extemely important.

Deborah

Originally Posted by casbahdance

When I read eshe's OP, and Lauren's response, I had to smile a little.

We have got to get over this notion that everything BD has to be out of the goodness of our hearts.

I have a non-wholesale source for hip scarves where I pay $20 each. Since the going retail price for these wraps is $35, I'm not about to mark them up 100%, because then they'd be overpriced. Instead, I charge $30, which is a margin of 67%. I still make a little on each scarf but I'm able to tell my students with confidence that because I'm able to get a bit of a deal from my source, I'm able to pass my savings to them and they pay a bit less than they might otherwise.

Regardless of what business I had, I'd never gouge my customers, but I don't think I'm immoral for compensating myself for the time, risk and just-plain-pain-in-the-neck stuff that goes with having a stock of goodies for sale.

So, sell on, everybody!

Deborah

..l;,I try really hard not to feel bad about making money. I know it's something I lecture my students not to feel bad about.

But I wanted to stress it because one of my first teachers was out to squeeze every drop she could out of students.

Originally Posted by ravenadesigns

another thing to consider - they are paying for the "convenience" of having the ability to buy it right there. Sure - they may be able to buy it on line cheaper but that have no idea about the quality, vendor, etc. You pay for convenience sometimes.

YES. And when I send them out to get stuff on their own they either

a) do nothing
b) search and then email me to help them pay or something else
c) make orders with errors in them that never get filled
d) order them so late I'm sweating hoping their stuff will get here for show time

Originally Posted by eshe

YES. And when I send them out to get stuff on their own they either

a) do nothing
b) search and then email me to help them pay or something else
c) make orders with errors in them that never get filled
d) order them so late I'm sweating hoping their stuff will get here for show time

LOL!! I no longer encourage people to place their own orders online. Teaching them to dance keeps me hopping, I can't teach them to use the web, too.

I have a Yahoo! group for communicating with my students. Once I posted a link to a thread on Bhuz where Kajal was offering a great deal on skirt sets I thought they'd be interested in.

Once of my students e-mailed me and said she was interested, but couldn't look at the Bhuz thread without registering. She was overwhelmed by the Bhuz registration process. How should she choose a screen name? If she used her real first name, would someone be able to steal her identity and access her bank account? How should she choose a password? Did she *really* need to have a different password for every account she created online? How do people remember them all?

And that was just to get on Bhuz to SEE the thread. Imagine if she'd tried to get on Kajal's site to place the order, and *gasp* pay for it!

I don't even pass along links to great deals any more.