Sunday, September 12, 2010 | By: Rose

Pricing the Merchandise

Profitability of the store of any kind of business is greatly affected by the pricing method used. Competition between or among stores should also be given consideration when pricing goods.

Different Component of Price
1. Cost- This refers to the part of the price that covers the merchandise. It is the amount paid by the retailer for the merchandise.
2. Mark Up-this refers to the part of the price which covers the expenses involved in selling the goods such as transportation, tax, etc.
3. Profit- this refers to the amount added to the item cost. This is equal to the selling price minus the cost and tax paid by the store owner.

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