Skip to Content.
Sympa Menu

market-farming - Re: [Market-farming] Typical retail markup

market-farming AT lists.ibiblio.org

Subject: Market Farming

List archive

Chronological Thread  
  • From: Willie McKemie <mf AT austinfarm.org>
  • To: Market Farming <market-farming AT lists.ibiblio.org>
  • Subject: Re: [Market-farming] Typical retail markup
  • Date: Wed, 4 Apr 2007 08:32:10 -0500

On Wed, Apr 04, 2007 at 06:59:46AM -0400, maury sheets wrote:
>
> Rachel,
>
> It varies. Talking to Whole Foods about their markup and they said 30 to 50
> percent. If they think they can sell more at a lower price point, they will

Grocery stores like to think in terms of "gross margin", which is, I
believe, is their markup amount divided by their retail selling price.
I think of a mark-up percentage as the markup amount divided by the
cost. Grocery stores seem to be happy with a 100% markup, which is
a 50% gross margin, which is price=2xcost. If you sell something for
$1 and the grocery store sells it for $2, that is 100% markup or
(($2-$1)/$2)= 50% gross margin. Please correct me if I've screwed this
up.

This, of course, varies WIDELY. I have seen grocery stores sell my
product for less than their cost. Typically, loss-leader, high volume,
highly advertised sale items are sold near cost. For your "run of the
mill" item, I would expect around 100% markup.

Grocery stores are, and must be, wary of "shrink". Essentially, the
fractional amount not sold. 50% shrink wipes out a normal markup. Two
marketing ploys a local grower might use:
1) my fresh product has a longer shelf life, thus, less shrink
2) my fresh product is in higher demand and will sell faster, thus,
less shrink

--
Willie, ONWARD! Through the fog!
http://counter.li.org Linux registered user #228836 since 1995
Debian3.1/GNU/Linux system uptime 381 days 15 hours 02 minutes




Archive powered by MHonArc 2.6.24.

Top of Page