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We Ask, You Answered

GDA Staff -- Gifts and Dec, 4/1/2011 4:49:46 AM

Mandy Becker SWAGGER GIFTS Cary, NCWe try to get a markup of 2.2. When we purchase items, we ask ourselves what the item could sell for. If that number does not work with our markup strategy, then we don't buy it, even if we really love it. It just isn't worth it to sell items at a 50 percent margin with the cost of freight, utilities, gift wrapping and labor.
     There are two categories where we only get 50 percent margin - cards and books - because the items are already priced. We try to make up those margins in categories with a higher perceived value, like jewelry and other women's accessories.
     If we get a show special or discount from the manufacturer we pass that along to our customers as a special deal. Our customers get a deal without sacrificing our markup. We do have promotional pricing on some items, such as "Buy 3 get 1 Free" or "Buy 4 or more at a lesser price." This promotes higher turnover, so we are often sold out of the items before our invoice is due. Not everyone takes us up on the offers, so we are able to cover the freight charges without losing money.Michele Bessey PERCH HOME Maplewood, NJ
    I've learned that in this economy keystone really is dead. Small businesses don't get the same discounts as big box stores, so we need to incorporate the cost of shipping and other overhead. That means we need to get at least 2.5 to 3 times markup to really thrive. My prices may be a little higher, but the experience you have while shopping my store makes it worth every penny (from displays to gift wrap to personalized customer service). I can't compete with discounters, so I don't try. I get my prices at least 85 percent of the time. I don't want my customers to think of my shop as a sale destination, but instead as a quality, inspiring place to shop.
     With that said, I am unable to mark up well-known brands (candles in particular!). Customers today are too savvy. This has forced me to seek new vendors and find independent artists, so I can set pricing in my area, and to reduce areas of my shop such as furniture where I get less markup and expand our personal accessories department where it is easier to get your margins.Ted Kennedy Watson WATSON KENNEDY Seattle, WA
     Our markups are really all across the board. Some items, like a Diptyque candle or a Molton Brown hand wash, are pretty much sold by all shops at a two times markup, so we adhere to that.
     For most lines, we do a 2.4 to a 2.8 markup, depending on the shipping costs, which for some lines can be quite high. For lines that I have found that are not overly saturated in the market, I will do a 3 times markup if I feel the quality of the product warrants it.
     I carry quite a bit of vintage goods that I travel to find, and are one-ofa- kind finds. Depending on what I found it for, the markup can be 4 times, as I have put a fair amount of money into finding it.
     Overall, I really look at an item and think what the market will pay, as opposed to just thinking all things need to fall into a standard pricing practice.

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