Pricing Flashcards
How do you calculate markdown dollars?
Markdown = original retail price - new retail price
How do you calculate off-price markdowns?
Off-price markdowns = (%off) * present retail price
How do you calculate total markdown dollars?
Total = first $ markdown + second $ markdown
How do you calculate planned dollars markdown?
Planned $ markdown = net sales * markdown %
How do you calculate markdown %?
Markdown % = $ markdown / $ net sales
How do you calculate markdown cancellation?
Markdown cancellation = (higher price - markdown price) * units on hand
How do you calculate initial markup?
IMU % = (expenses + profit + reductions + alterations - cash discounts) / (net sales + reductions)
What is a price point or price line?
A specific price point within a price zone.
What is a price zone?
A range of prices that appeals to a target customer.
What is a price range?
The spread between the lowest and highest prices offered for sale.
What is odd pricing?
A strategy to have retail prices end in odd numbers.
What is a loss leader?
A widely known brand that is sold at a price close to cost. The purpose is to drive traffic into the store so customers will buy additional merchandise.
What is multiple-unit pricing?
The practice of quoting a special price for the purchase of more than one item.
What is high-low pricing?
A strategy where an item is regular price during the week, and then on sale during the weekend.
What is everyday-low pricing?
A strategy promising consumers a low price without the need to wait for sale price events.
How do you calculate cumulative markup?
Look at the retail, cost, and markup percent for the beginning, purchases, and total for the season.
How do you calculate average markup?
Subtract the purchased cost/retail from the total cost/retail and divide by the units.
What are the steps to calculate net markdown percent over a period of time?
- Calculate the markdown dollars (difference in price times units).
- Calculate the markdown cancellation dollars (difference in price times units cancelled).
- Calculate net markdown (markdown dollars minus markdown cancellation dollars).
- Calculate net sales (units times price at which they were sold).
- Divide net markdown by net sales to get the markdown percent.
