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Subject:
Profits in makeup/cosmetics
Category: Business and Money > eCommerce Asked by: nikkelasen-ga List Price: $50.00 |
Posted:
12 Dec 2005 05:29 PST
Expires: 11 Jan 2006 05:29 PST Question ID: 604747 |
What is the mark up on makeup products, and who knows about this? If you can find the number for "Cosmetics" in general that will suffice. The mark up is the amount (percentage) by which the end price exceeds cost of production. As an example: a good is produced at a cost of 100 The producer sells it to the retailer for 200 and the consumers buy it for 400. In this case the overall markup is 400%, and the retailer markup is 100%. I am interested in the retailer markup, on make up in either Europe or the US. in your answer I will need a source to whom I can contact and discuss this with. Your task is thereby to find the actual mark up, and tell me who I can contact in order to dig deeper into this. Best regards Niklas |
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There is no answer at this time. |
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Subject:
Re: Profits in makeup/cosmetics
From: whyaduck-ga on 04 Jan 2006 14:09 PST |
Mark-ups are different for prestige, mass market and discount retailers, at least in the US. In prestige, for example, let's say a cream makeup sells for $100 for 2 ounces. The salesperson gets a commision of 20%, so that brings the cost to $80. The store gets 40% of the selling price, so now you have a $40 jar of makeup. But...the seller also has to pay rent for the counter space, which can add another 5%. Now you're down to $35 and the manufacturer hasn't seen a dime. The manufacturer is hoping to make a 40% profit, so they have to produce that elegant cream for about $20. This will have to include the cost of the raw materials, manufacturing costs, packaging costs, filling costs, facility overhead, shipping costs, advertising and merchandising, and so on. The cost for manufacturing, packaging and filling should run about $10. The packaging costs including filling are typically twice the costs for raws and manufacturing. So...you have about $2 worth of raw materials, and $1.50 in manufacturing costs to produce a finished formula, going into a package that costs about $7 (including the costs of filling and labelling) onto which you have to tack on enough advertising and overhead to be able to sell this product for $100. Not an easy thing to do. |
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