Cost-cutting Tips You Can Take to the Bank

THREE

Improve Your Margins

Work with suppliers to improve margins by lowering costs or increasing retail prices. Catalogers are reluctant to increase prices. Many use a bad formula when pricing merchandise. For example, if the cost of an item is $20 and your desired mark-up is two times, you might establish a retail price of $40, which yields a gross margin ratio of 50 percent. The preferred method of pricing is based on the perceived value of the item.