In conditions of falling demand fter a surge, demand for such goods drops sharply until the next season. When selling such products, the seller can regulate the markup, increasing it before the expected sales surge and reducing it at other times. , a business cannot add large amounts to the cost of the goods. Thus, the markup is adjusted to ensure stable sales with a small level of profitability.
Implementation costs
This group of expenses includes rent of premises c level contact list storage of goods in a warehouse, packaging, delivery and staff salaries. If sales costs increase, then the markup on the products also increases. The list of expenses that should be taken into account in the final cost of the goods directly depends on the specifics of the business.
For example, product manufacturers, in website development for car service addition to the factors listed above, must take into account the costs of delivery to points of sale. Small online stores can do without renting retail outlets, so they do not include this expense item in calculating the markup.
Tax burden
When calculating the markup, a business must also take into account tax payments. Otherwise, sales may be unprofitable. The following factors affect the amount of tax payments:
- legal form of enterprise organization;
- tax regime;
- type of economic activity;
- total sales volumes, etc.
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Along with the main taxes, individual entrepreneurs are required to pay a number of insurance premiums. Additional tax deductions may also arise (transport and land tax, property tax, etc.). The business takes all these expenses into account when calculating the markup.
It is worth noting that added value is not always malaysia numbers list rational. For example, there is a phenomenon of prestige consumption. Luxury brand goods are sold at a significantly inflated price. In this case, the markup will also be increased, since the buyer “pays for the brand.”
Important! Businesses must accurately determine their threshold prices. This is the minimum sales price at which the company will not incur losses.
You can set a single markup for the entire product line or apply a separate coefficient for each product category.
Formula for calculating the markup