Page 1 of 1

typical retail markup for furniture, lighting?

Posted: April 12th, 2012, 7:46 am
by username3d
Hey folks, pretty new to the industry here and I am trying to calculate my (wholesale) pricing for a few items I hope to bring to market. I would like to get a better understanding of the typical retail markup, I've heard 2.2 (220%), but was wondering if anyone here would be able to share any experience or feedback on this. Items include table lamps, chairs, benches, occasional tables, etc.

Thanks!

Re: typical retail markup for furniture, lighting?

Posted: April 12th, 2012, 8:14 am
by Bbarn
Who are you selling to? boutiques or chains? what kind of quantities? Rather than working backwards on your target price, why dont you start with what you need to succeed? That number (220%) depends on who your selling to and ive seen it quadruple from that.
I think with a generalized question, your going to get a generalized response.
Id say you might need to provide more info for a better response or go with what you have heard so far?

Re: typical retail markup for furniture, lighting?

Posted: April 12th, 2012, 10:30 am
by Scott Bennett
A 220% markup? In other words, $10 wholesale price, $32 retail? Maybe somewhere, but I've never seen it. Retail pricing is more commonly expressed in terms of margin, and typical retail margins are 45-55%. 50% margin is sort of the traditional standard, and is often called "keystone". A 50% margin means half of the retail sales price is gross profit, and half is the wholesale cost of goods. That's the equivalent of a 100% markup. 55% margin is 55% gross profit, and so on.

The only time I've ever seen a higher margin than low 50s is when a retailer is sourcing the product directly. In that case they can keep some (or all) of what would have been the wholesaler/importer's margin. This is for furniture, I have no idea what typical margins are in lighting, accessories, etc.

Re: typical retail markup for furniture, lighting?

Posted: April 26th, 2012, 7:34 am
by username3d
Bbarn wrote:Who are you selling to? boutiques or chains? what kind of quantities? Rather than working backwards on your target price, why dont you start with what you need to succeed? That number (220%) depends on who your selling to and ive seen it quadruple from that.
I think with a generalized question, your going to get a generalized response.
Id say you might need to provide more info for a better response or go with what you have heard so far?

probably boutiques and/or web merchants like 2 modern, fab.com, etc
not big quantities as most work will be coming through me (either produced or overseen)

It is a generalized question, because I am new to the industry, but thanks for helping to illustrate some different facets of it. I am getting a handle on my overhead and variable piece costs, but understanding a little bit more about the usual markup(s) will give me a better idea of what kind of market it'll be appropriate for

Re: typical retail markup for furniture, lighting?

Posted: April 26th, 2012, 7:37 am
by username3d
Scott Bennett wrote:A 220% markup? In other words, $10 wholesale price, $32 retail? Maybe somewhere, but I've never seen it. Retail pricing is more commonly expressed in terms of margin, and typical retail margins are 45-55%. 50% margin is sort of the traditional standard, and is often called "keystone". A 50% margin means half of the retail sales price is gross profit, and half is the wholesale cost of goods. That's the equivalent of a 100% markup. 55% margin is 55% gross profit, and so on.

The only time I've ever seen a higher margin than low 50s is when a retailer is sourcing the product directly. In that case they can keep some (or all) of what would have been the wholesaler/importer's margin. This is for furniture, I have no idea what typical margins are in lighting, accessories, etc.
heh, I've never been good with math, $10 wholesale ---> $22 retail is what i meant. but that would work out at about you stated 55%, so maybe i'm just expressing the same thing, but in the wrong way. Some of these thing I've been learning from my signifigant other, who works in the childrens footwear business, so similiar situations, but maybe a different lexicon