9Markups - What a retailer does to profit from the sale of an item. -Varies from store to store; can range from %
10How it works -Retailer purchases product for a given value, say $100. -In order to make a profit on the item they need to sell it for more than $100.-Retailers mark-up the price in order to make a profit.-Assume a 50% markup; then 50% of $100 = $50.-Retailer now sells the item for $150 and makes a $50 profit.
11WHY?Brainstorm why retailers have markups on their merchandise.
12Calculating MarkupsA watch cost $14 with a markup of 8%. What is the retail price of the watch? How much profit is the company making?
13Calculating MarkupsThe retail price of a set of new tires is $650, with a 15% markup. What is the original cost of goods? How much profit is the tire company making?
14CalculationsYou are given a markups calculations worksheet. You have the remainder of the class period to work on and complete this with a partner if you choose. This will be due and graded tomorrow.If you have questions, please ask!
16MarkdownsIn order for a retailer to sell all inventory without loosing all the profit, they sell items at costs lower than retail.- Markdowns vary from 1%- 99%.These are ‘sales’ retail stores have.
17How it worksStores discount their inventory to make it more appealing for a customer to buy.EX: A $100 sweater is marked down 25%.$100* 25% = $25The sweater now only costs $75.
18WHY? Brainstorm ideas why companies have ‘sales’ or ‘clearance’ items. Do retailers ever loose money on ‘sale’ or ‘clearance’ items?
19AssignmentYou are going to research 10 different items that are on clearance (use internet based searches or the ads provided).You are going to find the percentage markdown on a given item. Make sure the retail value is listed.Worth 20 points.