retail markups

I love receiving look books that list wholesale prices, because it’s a healthy reminder that retail is for suckers. If you buy something for full price, you are doing a very kind thing for the shopkeep (listen to me, “shopkeep,” like I’m in Merry Olde England) but it’s a dunce move for your finances.

Retailers don’t have a very fancy plan in place for marking up their merchandise. Usually they “keystone” the items, which is French for “make a large markup.” Essentially, the retailer doubles the wholesale price, and that’s what shoppers pay. Occasionally, though, retailers will do more than that; for instance, the handbag line that sent its lookbook suggests a markup of 110 to 120 percent.

What this means is that boutiques are unlikely to mark anything down below 50% unless it’s completely cluttering up their backstock or they think it won’t sell. It also means that in some cases, especially if you pay with cash, you can ask for 10 or 20% off the marked price. I don’t do this unless there’s a snag in the fabric or something like that, but some people do. They may be cheap, but at least they’re not paying retail…

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