Key Ratios of a Successful Catalog Company

Cost of goods should range from 45 percent to 55 percent, and of course, the lower the better. There may be room to reduce your cost-of-goods percentage by raising the retail, but you must remain competitive and keep an eye on the perceived price/value of each item. Reducing your cost generally is a less-risky approach to managing cost of goods. Negotiate with your suppliers at every stage of the life of each item in your catalog. Run the numbers for each item, and know what you can pay to make the item profitable. In addition, consider quotes from alternate suppliers.