Common Pricing Formula?
15/10/08 18:26 Filed in: Q & A
Q. Can you explain the most common method used in pricing a gift basket?
A. The most common way is not the most accurate way to determine a profitable margin, nor does it insure one, but it is helpful to newcomers to the trade. Here is the common formula:
Add up the wholesale cost of merchandise, container, and supplies (ribbon, shred, etc.). Double that base wholesale sum. Next, add a labor fee, usually between 15% - 30%. Finally, add the tax and delivery.
Example:
Wholesale cost $20
X 2 = $40
Plus Labor (20%) +$8 = $48
Plus tax and delivery = Final Retail Price
A. The most common way is not the most accurate way to determine a profitable margin, nor does it insure one, but it is helpful to newcomers to the trade. Here is the common formula:
Add up the wholesale cost of merchandise, container, and supplies (ribbon, shred, etc.). Double that base wholesale sum. Next, add a labor fee, usually between 15% - 30%. Finally, add the tax and delivery.
Example:
Wholesale cost $20
X 2 = $40
Plus Labor (20%) +$8 = $48
Plus tax and delivery = Final Retail Price