Dear Professor Cram:
Could you tell me what the standard markup for an apparel manufacturer to a retailer is and the formula used? Thanks!
Karen B, Hotmail
Thank you for your interest in College-Cram.com and thanks for your question. You may want to check out our Smartacus Study Sheet on markup and markdown to review our two Cramlets that cover markup (one calculating markup from price, the other from cost).
You seem to be aware that markups vary widely by industry. They also can vary within an industry. I have not worked with an apparel manufacturer, but I have worked with a bedding (sheets/comforters…) company and our markup was 100% to the wholesaler who also made 100% markup to the retailer… our cost was a very low percentage of the retail price, and there was some bit of discounting done in our line. I suspect that much apparel is priced similarly.
The formula for Markup from Cost is:
- Price = Cost x (1 + Rate)
I hope this helps. Let us know if you need anything else.