Retail Marketing

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I’ve always felt that the shops in my town always look so cluttered, almost like things are just thrown together,rather than having a purpose.  I particularly love  visual merchandising so  I decided to write about this  particular display by Paco Rabanne. Continue reading

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production cost

Rope Necklace #1                  Standard Cost

 

3 Yards rope                                                       $5.00

1 pr fasterners                                                 $1.00

1 hr @ $5                                                          $5.00

 

Total production cost                                     $15.00

 

20% Profit                                                         $3.00

 

Total cost plus profit                                      $18.00

 

Estimated retail price                                     $20.00

 

 

……………………………………………………………………………………………………………………………………

 

 

Rope Necklace #2                           Materials & Labour @ lower cost

 

3 yards Rope                                                                   $2.70

Fasterners Online in                                                           .30

.5 Hrs                                                                                $2.00

 

Total Production cost                                                      5.00    

 

20% Profit                                                                         $1.00

 

Total Cost plus profit                                                      $6.00

 

Estimated retail price                                                     $20.00

 

 

 

 

 

Costing an item is simple as long as you have a profit margin.

The important thing to remember is the lower the cost of materials and labour the higher the returns. It also gives you a fair amount of leeway if you are to sell the items in large amounts to shops at a lower price which will ensure you still make a profit. As In this case the the cost of producing the necklace is $6.00 whilst you still make a profit.

In this exercise I have learnt that its  always worth trying to get materials and labour at the lowest cost possible. In some cases it may not always be easy as materials are sold according to suppliers mark-ups Still it makes a huge difference in terms of production costs and hence  profits.

Having asked to use a non-conventional material I chose cotton rope or candle wick which was easy to work with. It was more like a mock -up of the real thing