Welcome to the Small Business Ideas Forum! We are a community of over 100,000 small business folks with over 163,000 posts for you to browse. We pride ourselves on being the friendliest forum you will find and we'd love to have you as a member of our community. Please take a moment and register for a free account. If you need any help, please contact Chris Logan.

Small Business Ideas Forum

Small Business Ideas Forum

A friendly place to share small business ideas and knowledge, ask questions, find help and encourage others that are involved in the small business industry. Topics include small business marketing, generating revenue and small business computing.

Go Back   Small Business Ideas Forum > General Issues > General Small Business Issues
Register Search Today's Posts Mark Forums Read

Reply
 
Thread Tools
Old 13th October 2007, 12:46 PM   #1
bookdocmarie
Member
 

Join Date: Oct 2007
Posts: 2
Default First Time As A Middle Man - Pricing Questions

i have had my own biz for 20 yrs and for the first time find myself in the position of acting as the middle man for a client.
i am a bookbinder and a 1 person operation. the client knows the books are to be outsourced, and that i will stand behind the work.
my delimma is that i am not sure how to mark up the cost.
the work will be done 1,500 miles away from me so there is shipping as well as perhaps a trip to the site. quantities are not big but considered speciality work. 500 and 1,000 pieces. any ideas would be greatly appreciated.
this is my first time on this site. so glad to meet you all.
marie p.

bookdocmarie is offline   Reply With Quote
Register or log in to remove this ad.
Old 14th October 2007, 06:52 AM   #2
mktgbiz
Moderator
 
mktgbiz's Avatar
 

Join Date: Dec 2004
Location: New Port Richey, FL
Posts: 1,523

Default

How to mark up huh?

How much do you want to make?

If you want to make 10% divide the net by 90%.
If you want to make 20%, divide the net by 80%.
If you want to make 30%, divide the net by 70%.

Here's a for example.

Your net (cost) is $.75 per book to bind the books.
Take $.75 and divide by .70 (70%) and you get a 30% profit margin of $1.0714285 rounded up to $1.08.

Some people multiply the net (cost) by 30% thinking it's a 30% PROFIT MARGIN when it's a 30% mark up of the cost. That calculation would look like this. $.75 times 130% = $.975 rounded up to $.98.

For years I used the WRONG calculation (second example above) and couldn't understand why my profits didn't register 30%. Somebody informed me that your profit margin is always based on your sales, your selling price. Profits are not based on your COST. I've been ok since then.

If you are a casual reader of this post and in a business where you want to make 30, 40, 50 percent profit margins, just reading this and applying it will allow you to make more money immediately and forever. It has for me!!!

Hope this helps!!!!


-

__________________
10 years and running....still the most-loved promotional product!
www.TheJavelinPen.com
Holiday Greeting Cards:
www.holidaycardwebiste.com/getmorebiznow
mktgbiz is offline   Reply With Quote
Old 14th October 2007, 08:04 AM   #3
PressureProsInc
VIP Contributor
 
PressureProsInc's Avatar
 

Join Date: Feb 2006
Location: Havertown, PA
Posts: 388
Default

Yep. I lost a deal with a major importer because they told me they needed a 50% markup. I did my calculations and I could handle their 50% markup. Of course he ended up meaning "margin". It never ceases to amaze me how business people at all levels do not understand the difference. To get a 50% profit margin, you need a 100% markup. Those are very different numbers.

__________________
Ken Fenner
Roof Cleaners PA
Roof Cleaning Service for the Philadelphia Suburbs
PressureProsInc is offline   Reply With Quote
Old 14th October 2007, 11:56 AM   #4
Logan
Administrator
 

Join Date: Jun 2004
Location: Colorado
Posts: 8,047
Default

Quote:
How much do you want to make?
That is always the starting point I use, and a good question to emphasize. Outside of profits and margins, consider what you will be satisfied with for the work/expenses involved.

__________________
Search Engine Guide - Small Business Guide to Search Marketing
Small Business Brief - Small Business Ideas Forum, Articles & News
Logan is offline   Reply With Quote
Old 15th October 2007, 08:56 AM   #5
bookdocmarie
Member
 

Join Date: Oct 2007
Posts: 2
Default

thanks folks,
seems pretty elementary when you put it that way.

bookdocmarie is offline   Reply With Quote
Reply   

Bookmarks




Thread Tools

Get Updates
RSS Feeds:
RSS Feed for General Small Business Issues RSS for this Category Only: General Small Business Issues

RSS Feed for Small Business Ideas Forum RSS for Entire Forum
Forum Rules


Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump


Small Business Ideas Forum


 
At Your Business - Small Business Directory
Free Business Forms - Prewritten Documents
 
Search Engine Guide
Small business guide to search marketing

 
Small Business Brief
Fetching the Best Small Business Info


Used Values - Free Links
Blue Book





All times are GMT -5. The time now is 01:59 PM.


Powered by vBulletin® Version 3.7.3
Copyright ©2000 - 2020, Jelsoft Enterprises Ltd.
Copyright 2004 - 2018 - Privacy