How to calculate the retail price

The retail price is the price at which a product is sold in retail for the public and some organizations. Correctly calculated prices are a condition for the profitability of trading enterprises. Calculating the retail price is pretty easy.

Instruction manual

1

Retail price depends on supply and demand. It is calculated from the wholesale price. This is the price at which retailers purchase goods at wholesale stores or from manufacturers. To the original wholesale price you need to add a trade margin. It is calculated taking into account the costs of staff salaries, transportation and packaging of goods and other costs. This also adds the planned profit.

2

The retail price may include various taxes and excise taxes on excisable goods. If the item is excisable, the selling price is based on the selling price. It is equal to the value of the wholesale price plus the percentage of excisable goods.

3

The size of trade mark-ups by sellers and retailers is set independently, taking into account market conditions. The exceptions are drugs and medical devices.

4

Trading allowances are subject to regulation. Margins are regulated for baby food, for the products of public catering establishments serving educational institutions, for certain goods intended for sale in the Far North and equivalent territories.

5

In market conditions, retail prices sometimes depend not only on wholesale prices, implementation costs, but also on other factors. First of all, from the solvency of buyers, from the demand for goods (seasonal demand), from the usefulness of the goods. All this must be taken into account when setting the retail price.

6

There are varieties of retail prices. For example, commissions. They are determined by agreement with the owner of the goods and taking into account the demand of potential consumers. Auction prices are based on maximum demand. But they should never fall below the initial price that the seller of the goods or a special appraisal commission set. A variety of retail prices are market prices at which farmers sell their products.