When you are in the retail business, you need to calculate the right price to sell an item. Sell the item too cheaply and you make a loss. Put too high a price on the item and your customers might not purchase it. Calculating an item's price for sale, or calculating an item's price markup, can be achieved with a little industry research and a fair knowledge of basic math.
Research the industry norm for percentage markups. For example, if you're an upscale clothing store, you might have a 50 percent markup.
Convert the markup to a decimal by dividing by one hundred. In the above example, 50 / 100 = .5.
Subtract the decimal in Step 2 from 1. In the above example, 1 - .5 = .5.
Divide result in Step 3 by the cost of the item. For example, if your cost was $12, then $12 / .5 = $24. This is the price at which you would sell the item.
Ensure that you include all of your overheads and expenses when pricing items. Just because the market markup price may be competitive, it may not be a profitable price if it doesn't cover your expenses.
- Ensure that you include all of your overheads and expenses when pricing items. Just because the market markup price may be competitive, it may not be a profitable price if it doesn't cover your expenses.
Stephanie Ellen teaches mathematics and statistics at the university and college level. She coauthored a statistics textbook published by Houghton-Mifflin. She has been writing professionally since 2008. Ellen holds a Bachelor of Science in health science from State University New York, a master's degree in math education from Jacksonville University and a Master of Arts in creative writing from National University.