How Much Markup Should you Place On on things you sell? On average, I mark up my parts about 30% more than the cost I bought it for. 10% of that goes to tax, leaving me with 20% profit. However, I dont use a 30% markup for everything I sell. On some lower priced items my markup may be as high as 100%. For example, if I bought a special cable for $2.50, I will probably sell it for $5. If I were to use my 30% markup for everything, the lower priced items would just not be worth it. It takes time for me to go out and buy them, they take up space in my workshop and they could potentially lose value. In any case, regardless of whether I am selling it for 30% extra or 100% extra, my prices are usually below the price of the Big Box stores anyway. I know of some Computer Technicians who will use 30% for everything, regardless of what it is. There are also many Computer Technicians who use a scale like me. For example: • Accessories: 50-100% • PC Hardware: 30% • Peripherals: 25% • Software: 10% There are also other Computer Technicians who will sell their computer parts at cost price citing that they make money on the service. After doing some research on these technicians, it seems that their general viewpoint is that they feel that it is taking advantage of the client. I believe that those Computer Technicians should do whatever makes them feel comfortable since it is their business, but I personally disagree with them. I think one of our forum members “Appleby” said it best in a forum post: Look you are in business and so is every other store you walk into. Do you think the grocery, hardware, clothes or car part store sell their inventory at cost? Nope, they all mark their products up and some of them over 100%. Do you think your mechanic buys parts for you car and sells them to you at his cost? The lawn mower repair shop, A/C guy, plumber? None of them. And if they do, why? You don’t know what a muffler costs him. What I do stress out over is selling my parts at fair retail prices. For common stuff like routers, switches, etc. I sell at Staples prices since they are my only local retailer. So I try to match or beat their price. And do you know what? No one knows or cares. I tell people all the time that I’ve got XX here and Staples sells it for $5. They look at me like, “$5? Who cares?”. If you do your homework and shop around, you’ll start finding ways to make ALOT of money on parts, all the while, still giving the customer a good fair price. Remember this: Sure your customer can go on eBay and buy the part they need, but they don’t KNOW what part they need. Plus, they will end up buying some off brand knock off in Hong Kong and it will take 5 weeks to arrive and then won’t be the right thing. You are making sure you are buying quality parts and getting fast shipping. Plus, as others have said, you are taking a risk….you take money out of your pocket to buy that part and set it on your shelf in the hopes that someone will come in and need it. You can’t do that for free. And if you are buying the parts on a “as-needed” basis, you still need to make money. It takes time and energy. Heck I could go on and on about this and the reason is, once I figured it out, I started seeing how much money I was loosing by not marking parts up. Plus the customers had NO idea nor showed NO gratitude for the money I saved them. They were expecting me to make money, so I should be. By the way, my goal is to make 50% mark up. That’s alot. Most items I can’t do that, but some smaller items like ethernet and USB cables, I might make 600% or more. Also, items like modems, RAM, hard drives etc can be bought for 30-60% less than Staples sells them for, so there is room for a nice mark up there sometimes.
Posted on: Sun, 16 Mar 2014 10:01:48 +0000
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