You can read "4 Must-Know Facts About Profit Margin" here. Reply to this message to discuss it.
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WEll, there is another source of " non-profit" , specific to some families of products ( electronics) : cost of ensuring after-sales technical service.....
It should not be forgotten when computing your sales prices....
It should not be forgotten when computing your sales prices....
Good post. It is a big learning curve for new online shop owners to get the right selling price.
Factors such as broken or damaged goods, returned goods from buyers and cancelled sales all add costs and precious time to your business.
Don't forget those rip off bank charges aswell.
Factors such as broken or damaged goods, returned goods from buyers and cancelled sales all add costs and precious time to your business.
Don't forget those rip off bank charges aswell.
Those were 4 very good points about retailing and how to manage your profitability, but the true nature of profit MARGINS was misrepresented.
Like most people, even the author confused mark-up with profit margin. In the example where a person bought an item for $19 and then sold it for $29, the author stated that the profit margin was $10.00. Yes, $10 is the profit, but it is not the “margin”.
Profit margin is normally expressed as a percentage. It is the percent of money that you get to keep from the overall sale price. So if the profit on a product was indeed $10 from a $29 sale, that profit margin would be 34% ($10 divided by $29). And the mark-up would be 52%.
This example sorts it out pretty well:
My cost for a widget is $50, and I mark it up another $50 for a sale price of $100.
My mark-up is 100%.
My profit margin is 50%
Like most people, even the author confused mark-up with profit margin. In the example where a person bought an item for $19 and then sold it for $29, the author stated that the profit margin was $10.00. Yes, $10 is the profit, but it is not the “margin”.
Profit margin is normally expressed as a percentage. It is the percent of money that you get to keep from the overall sale price. So if the profit on a product was indeed $10 from a $29 sale, that profit margin would be 34% ($10 divided by $29). And the mark-up would be 52%.
This example sorts it out pretty well:
My cost for a widget is $50, and I mark it up another $50 for a sale price of $100.
My mark-up is 100%.
My profit margin is 50%