Methods For Marking Up

Concepts of Marking UpA ResearchNAMEPROFESSORSCHOOLA markup is an amount added to the equipment casualty of a good preceding(prenominal) its cost of reapingion and diffusion . Markups must have the competency to suffice all foreseen expenses and reductions on the goods to be sold (Axarloglou , 2004 . in that location ar three regularitys to which price markups are determined . These are found on the yield s cost , selling price and its shelf life (for perishable goodsOn placing markups based on the product s cost , the retailer primarily conceives how much were his expenses in agreeing the product he is to sell , such as production and distribution cost . Markup prices from this method entail how much profit the retailer would receive on each item sold . This price also lays a uniform selling price on goods of the same lovable . Supermarkets and grocery stores usually follow this method of pricing , for they offer the same identical products (of different brands ) to the marketMarkups based on selling price mean eon rely on the reflection of prices both from another(prenominal) retailers as well as the response of the consumers . Retailers usually come up with lower markup prices condescension using the same information from cost-based markups , but this method serves more than as a promotional strategy in to obtain patronage from consumers .

Lower markup prices especially on goods that are graduate(prenominal) in demand indicate more consumption as compared to when these goods are priced only to earn profits from their production be (Evans , 2002These two markup pricing methods are used depending on what kind of goods are to be sold in a anneal . Cost-based markups are used to lay uniformity in prices , while selling price markups mean competition . On the other hand , pricing perishable goods are based on a different reason . Above production costs and market competition , perishable goods have a shelf-life and therefrom become useless afterwards they expire . Retailers therefore consider how many unsold units of the product would be left after its expiry date , and its markup should be able to cover this red SourcesAxarloglou , Kostas (2004 . Eastern Economic Journal (30 ) 2 , 223-235Evans , Joel R (2002 . area 4 : Planning for Shrink , Price Lining and advert . Pricing and Retailers : Questions to Consider , see http /www .retailindustry .about .com...If you destiny to get a full essay, order it on our website: Orderessay

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