Forums: Discussions for entrepreneurs and small business.

Hi. Well meet everyone.
Although we opened for business 3 weeks ago we have been pretty much  following what the different sale representatives suggested as far as pricing the goods. We have never done retail business before, of course. And is  a little grey area when it comes down to pricing.
Iwas wandering if ther are like " rules of tumb " or guidelines, in particular for retailers when it comes to stick the price on the goods.
The store is my wife and doughter brainchild actually, since our doughter is a ballet student. The closest shop for shoes, clothing and accessory is a 2 hour drive from where we live. I suggested we extend our market to all other forms of dance/movement/fitness so we could offer more products and cover different needs.
Any advice ?
Thank you all so much in advance, i am really glad i found out about this site
very informative
Really appreciate
Lucio




 

Pricing is 70% art and 70% science. Yes I know those %s don`t add up, but like in the retail world, it never really does.

I am assuming this is a dance supply store? You need to figure out your true overhead (fixed costs such as rent, utilities, your pay, etc.) before you can really start to price your merchandise out. A 300% markup (Your cost $1, you sell for $4) will probably be a good starting point and then adjust up or down depending on your volume. 

If your dealers are pushing more of a 60/40 split; you pay 40-60% of the suggested retail price and then sell it for the SRP you probably wont make it as a business unless you have a real high volume. There just isnt enough profit built in a split like that to cover all your fixed costs and give yourself and kind of living wage.

Please take everything that I say with a grain of salt. I dont have experience with just a "pure" merchandise store, all of my experience comes from service & merchandise type stores where the bulk of the profits come from the service while the merchandise is to draw them into the store.

 

I would check with some of the local dance studios and see where they get their merchandise from, catalogs, etc. and see how their prices will compare to yours.

How your market yourself to the local dance studios and involve yourself in the dance community is going to make or break you.

Good luck to you and your endeavors!

 

Chris

Here i am back. been kind of busy, sorry.
Thank you very much for your reply Chris, and yes pricing must be a wierd kind of science. This may be a starting point though.
Thank you

I can understand that you might not be educated as to running a retail business ....

But I`m surprised that a s a business owner you don`t take advantage of the resources of the web. You`ll come here and ask a question ... hoping someone will give you the magic answer.

With a quick search on Google ...

here`s what I found ...

http://www.pricingsociety.com/Art_At_What_Price_Guidelines_F F.htm

I`m confident that if you simply do some basic searching you`ll find the Basic Principles of Reatail Pricing.

Good Luck!!

 

hey, lucio! welcome to the StartupNation community. i sent some messages to a few people who are expert in retail pricing and hopefully they`ll post advice for you here shortly.

thanks for being part of our community.

way to START IT UP!

rich

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Rich Sloan , Co-Founder, Chief Startupologist, StartupNation