Business of Retail Ch 4

Front

What is gross profit?

Back

Gross profit is the difference between revenue and the cost of goods sold (COGS).

Front

How do you calculate gross profit?

Back

Gross Profit = Revenue - Cost of Goods Sold (COGS).

Front

What factors should be considered when setting a retail price?

Back

Consider customers’ price preferences, costs of products, website service fees, competitor's prices, and desired profit.

Front

What is net profit?

Back

Net profit is the difference between revenue and all expenses, including COGS and operating expenses.

Front

How do you calculate net profit?

Back

Net Profit = Revenue - Total Expenses (including COGS and operating expenses).

Front

What is a markdown?

Back

A markdown is a reduction in the selling price of a product.

Front

If a store pays $12 for a schoolbag and wants to make a $3 profit, what is the minimum selling price?

Back

Minimum Selling Price = Cost + Desired Profit = $12 + $3 = $15.

Front

What is vendor pricing?

Back

Vendor pricing is when the manufacturer's suggested retail price is used as a guideline for pricing.

Front

What is psychological pricing?

Back

Psychological pricing is a pricing strategy that considers the psychological impact of prices on consumers.

Front

What is keystone pricing?

Back

Keystone pricing is a retail pricing strategy where the retailer doubles the wholesale cost to determine the retail price.