| By :
Mark Etinger
Being a small retailer is quite a feat in today's economic climate. Although it would seem like people are reluctant to buy, if you set up your store in a way that presents the merchandise to customers in an attractive manner, and have all of your items properly priced with tagging guns and pricing labels, you're set to start seeing some business come in. But unfortunately, setting prices at the right level can be a bit of a challenge, especially for new retailers. Here are a few tips to help you along the way. 1) It should be noted that selecting a price level in relation to your competition is a key strategic move. If possible, scope out your local and online competitors and see how certain items are priced. It's also helpful to see what items are selling the most, what items are selling the least. Check out their clearance section. What items are mostly on the shelves? How are those clearance items priced? Some stores make the majority of their sales on their clearance items, so you may want to consider having a large section of low-end items labeled as “clearance” and sectioned off so it's easy to find. Clearance items are always a great way to drum up sales. Just make sure your pricing labels are updated to the new clearance price. Customers hate doing the math themselves, and will be more likely to not make a purchase. 2) When working on merchandise price markups, there are several things you need to take into account like sales expenses, and profits. Your initial markup must be large enough to cover anticipated expenses, and still make a profit. You need at least 50 percent markup to survive if you're a small retailer. If you decide to go with a different markup besides the standard 50 percent, you'll need to crunch a few numbers. According to Entrpreneur.com, you can calculate your initial markup as following: Selling price = [(cost of item) ÷ (100 - markup percentage)] × 100 As an example, let's say an item costs you $10 and you want to use a markup of 35 percent. The selling price will be calculated like this: Selling price = [(10.00) ÷ (100 - 35)] × 100 Selling price = (10.00 ÷ 65) × 100 = $15.38 3) After you've gone ahead and calculated your initial markup figure. It's time to start setting the prices on your merchandise. There are several questions you should ask yourself before you start haphazardly setting prices with your tagging guns: Will odd-number ending prices entice customers? Will customers be more inclined to make a purchase if you do multiple pricing, i.e. 2 for $10, etc. Will percent-off coupons be available to customers in newspapers and online? Would periodic sales with reduced prices and heavy advertising be something that you'd like to see in your store's image. You should also take the current economic climate into account in your area into account when setting the prices. Consumers tends to be price conscious when the economy is lagging, so you may have to consider lower-than-normal markups to be competitive.
|
![[Valid RSS feed]](http://www.articlesbacklink.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites
