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Térrace Review — Wednesday, November 2, 1988 17

Business Beat
Retail pricing: markup

In the preceding columns, we discussed
the various ways by which retail business
is financed, In this, and in subsequent
columns, we'll discuss the more impor-
tant aspects of retail operations, starting
with pricing. .

: All retailers, whether department store

a ce chains or corner novelty shops, operate in

essentially the same way. They buy mer- |
by Phil Harti chandise directly from the factory or

Manager, Terrace through wholesalers and sell it to the _

- Federal Business public at prices calculated to cover their
Development Bank costs and show a reasonable profit.

This seems to be a simple enough operation but it can be, in
practise, extremely complex. The proper calculation of the prices
at which his merchandise is sold is the most demanding require-
ment the retailer must meet. If the selling price is set too high,

customers are lost. If it’s set too low, the retailer loses money. Chioe Asti-Rose (right), a Grade 12 student at Caledonia Senior Secondary School, recently

Each retailer must devise a pricing strategy according to the recelved a framed certificate and a cheque for $100 as first prize in the Terrace Review

type of merchandise handled, what it costs, the volume of editorial essay contest. The presentation was made by Terrace Review publisher Mark
_ business expected and the character of the competition. Twyford and staff reporter Charlynn Toews.

Many other considerations will also enter into pricing strategy.
Among them are the retailer’s location, the terms of the lease and
the buying habits of potential customers.

All these must be brought together in determining the selling oF oo ;
value of merchandise. That is the objective of all retail pricing: Tt ae -

The determination of what the retailer must realize, from the sale Th , | 9 _

of merchandise, to cover costs and show a profit. a | W / d t

” The difference between what the retailer pays for merchandise . ec or S mos

and the price at. which it is sold is the markup. Markups vary . _ o ry , o
widely from one piece of merchandise to another. b t

~ The markup on fast-moving merchandise is usually lower than ny expensl \ e USINESS SUI
average. The retailer handling such merchandise is counting on ae ) e °
__. the rapid rollover of stock and accompanying high sales volume ages

“to cover costs and show a profit. Wwasn esign: In

- Conversely, the markup on slow-moving merchandise is usually = e

higher.than average. That’s because the retailer must carry such

: . merchandise over a longer period before recovering the costs of jal on, alls, or I I 1e.
purchase. | : .

Markups not only vary from one piece of merchandise to

another. The markup on one piece of merchandise can also vary | 9 . a a
vA foutwest retailer, for example, will put a higher markup on It S from North Vancouver.

rubbers and galoshes in late fall and early winter when the de-
mand for them is strongest. If there is still some stock in late
winter, the retailer reduces the markup to clear shelves for spring
and summer stock. _ —_ ne
The primary objective of the retailer’s markup is to provide . They're $250,000 - -

Columbia's leading
over the year, a margin on sales large enough to make the © = j- each, making the edge subsea industry
business a viable one. Newtsuit, a product employing more

In our next column, we'll show how markups are calculated of North Vancouver: than 1000 British
and go further into the matter of margin on sales. | based International Columbians and
Hard Suits Inc., the with annual sales of
world’s most expensive $60 million.
business outfit. Buc, So, it shouldn’t be
when the job is 300m surprising that we're
below the surface of. the world leader in
the ocean, dressing for underwater technology.
SOCIAL SERVICES TRAINING PROGRAM success means more After all, with 7000
_ than having a flair km of coastline there's
The College of New Caledonia Is accepting for fashion. _ no better place for us to
applications for the Soclal Services Training As the only diving be than on the shores
Program. This certificate program prepares suit in the world that of tomorrow.
students to work with mentally handicapped allows you to work 50 storeys underwater, in For more information about B.C.’s expanding
children and adults In a variety of settings. There almost normal atmospheric conditions, the economy, contact your MLA, your nearest
are six courses and one practicum. All oo ral Newtsuit has the capability of revolutionizing Government Agent, or write to the Ministry of
are in a distance education (correspondence) the difficult task of doing business underwater. | Regional Development, Parliament Buildings,

format and can be combined with full-time
employment. |
Applicants whe are not currently employed In

this fleld should have working with mentally
handicapped children or adults as a career goal.

The admission requirements are Grade 12 gradua-
tion, G.E.D. or mature student status with related
work experience.

For more Information and registration package
contact:

International Hard Suits Inc.is part of British Victoria V8V IX4.
College of New Caledonia
Counselling Department 561-5618

Admissions and Registration 561-5800 >
Closing Date: Applications for the January 1989 _ Boe
semester must be received by December 16, 1988. 7 | aon
11/26/11/23c - ;
Together. A Better B.C.

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