"I mark up three times" is the most repeated and most misunderstood phrase in retail. Three times what? On the price paid or on the displayed price? VAT included or not? These are questions that determine whether there's anything left at the end of the month. Here's the full bill, including the costs that almost everyone forgets to include.
The reload It is measured by cost: you pay 2 euros, sell for 6, you have recharged three times. margin It is measured on the sales: on those 6 euros the margin is 4, that is, 67%. Confusing them is the classic way of believing oneself richer than one is: a 100% markup (from 2 to 4) seems like a lot, but it's a 50% margin, and from there you still have to factor in rent, staff, and everything else. In our catalog, each card shows the recommended retail price already calculated, so the bill is done before ordering, not after.
The price displayed to the public includes VAT; what you actually earn is the price divided by 1.22. A €5 item on the shelf is worth €4.10 to you. If you calculate the margin on the price including VAT, you're giving yourself 18% of revenue you never earned. This is the most common error we see in manual calculations.
Beyond the purchase price, there's shipping, labeling and repackaging, merchandise that gets ruined or disappears, and end-of-season sales. For products under €10, these costs aren't peanuts: they're the difference between a healthy margin and an imaginary one. Rule of thumb: if an item can't handle a threefold markup, it must have a compelling reason to stay on the shelf—it brings in people, completes a category, or sells alongside other items. Otherwise, it's just work for nothing.
Below €10, the customer doesn't calculate: they recognize price bands: €1.50, €2.90, €4.90, €6.90, and €9.90. An item priced at €5.40 sells less than the same item priced at €4.90, and sometimes even less than it would at €5.90, because it doesn't fit into any band. It's best to choose the band first and then check that the markup fits, not the other way around. If it doesn't, that product isn't for your store.
Register for free: prices visible within 24 hours
No, it's a reference: you decide. It helps you immediately see how much margin you have left, before ordering, without having to recalculate item by item.
It's a good starting point for products under €10, not a law. Highly recognizable items are marked down less because the customer knows their price; more can be done for unique pieces.
First try moving it: half the time it's the wrong place. If it stays put after moving, discount it and close: the space is worth more than the margin you were hoping for.
