How does a company make a profit? The easiest and most direct answer to this is by selling a product or service for more than it cost the company. The percentage over the cost they charge the customer is known as the markup. There are many factors a company needs to consider when determining a products markup price. First is the cost of production. How much does it cost the company to make or acquire the goods sold? Second is the market demand. How well is the product going to sell to your target audience? And the third would be what type of markup works for your business? Is there a standard markup for your industry? Depending on your type of small business you could benefit from different markup percentages. For example, service firms, wholesalers, retailers and contractors are all going to have a different industry markup percentage. This guide below was put together by the team at Swagbucks.com and ranks 32 different industry products and services by percentage of markup. The top 10 are below:
1. Text Messages - 6,000%
2. Bottled Water - 4,000%
3. Brand Name Prescription Drugs - 200-3,000%
4. High School Class Rings - 1,329%
5. Movie Theater Popcorn - 1,275%
6. Fountain Soda - 1,150%
7. Graduation Cap and Gown - 1,000%
8. Mattresses - 900%
9. T1-83 Plus Calculator - 829%
10. Eyeglass Frames - 250 - 1,000%
Infographic by: swagbucks
