A Little Insight into Price Markups

564881_10151229912131888_2115605573_nThis picture was recently posted to an online forum (I won’t say which, in case someone would get fired for posting it).

It shows a store’s (I think Toys R Us) inventory system, listing a number of upcoming Teenage Mutant Ninja Turtles toys, the price the store will pay for them, and the price at which they will sell them to the end consumer.  As you can see, the markup is around 55%.

A number of years ago, I briefly worked at a Futureshop (which is very similar to Best Buy) in the DVD/Games section, and the markup for most movies was less than one dollar.  While I was there, the complete series box set for Seinfeld was released and we actually sold it for below cost.  That’s what you call a ‘loss leader,’ something you sell at a loss to get people into the store.  Video game consoles were sold at cost; so we were told to really push the accessories and extended warranties and had quotas for how many add-on sales we had to make (so, if you’ve ever wondered why some sales people are so pushy, that’s why).


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