How much profit should each sale make?

Shopify Discussion
1

Hello guys..

Can i ask please.. How much should be the profits per sale?

I don’t know how to set the price for my products

2

Hey, @Sermak .

Thanks for bringing your question to our Community forum. I understand that you’re seeking guidance to determine your profit margins. I’m here to help!

To gather some more context, may I ask what type of products you sell? As a general rule of thumb, a 10% net profit margin is deemed average, while a 20% margin is deemed high and 5% low. With more information about your products and where your business is located, I can help you determine average profit margins for your industry.

In the meantime, I recommend using the Shopify profit margin calculator. This tool can help you find a profitable selling price for your product. This calculator uses a simple profit margin formula to calculate what price you should charge customers for your product for an optimal merchandise margin ratio. I also recommend checking out this blog: How to Increase Profit Margins.

It’s important to consider that increasing your product price is not the only way to increase profit margins. For more information on this topic, check out our free Shopify Learn course: Tactics to Increase Average Percent Profit Margin.

Looking forward to hearing back from you, so that we can continue to work on this together.

1 Like
3

Thanks for your support @Luna_1

I am in clothing industry and i am located in Greece

How much should be the markup %?

4

Hey, @Sermak .

Thanks so much for getting back to me. There are many things to consider when determining your product price markup. I’m happy to provide some more information.

Your pricing strategy should be based on your target audience, what they are willing to pay, and what your competitors charge for similar products. These are all things that you will need to consider before determining your markup percentage. However, I can share some popular strategies with you, such as:

  • Cost-plus pricing, also known as mark-up pricing. This is one of the simplest ways to determine your markup. You make the product, add a fixed percentage on top of the costs, and sell it for the total. For example, if you add a 35% markup on top of the $45 total it cost to make your product as the “plus” of cost-plus pricing.
  • Keystone pricing is when a retailer determines a retail price by simply doubling the wholesale cost they paid for a product to set a healthy profit margin. Say a retailer buys your product for $10 and wants a $10 gross profit, they would charge $20 for the product in-store. For example: Retail price = [cost of item ÷ (100 - markup percentage)] x 100.

Keep in mind, these are just examples. Although I would love to be able to give you a straight answer, there are many strategies you should consider to determine what is best for you and your business. For more information, check out: Pricing Strategy Starter Guide.

In the apparel segment of retail, brands typically aim for a 30%–50% wholesale profit margin. This can be determined by multiplying your cost of goods by two.

Please let me know if you have any questions!

1 Like
5

Thanks for your interest and help

6

Hey, @Sermak .

No problem at all. Please don’t hesitate to reach back out if you have any questions along the way.

All the best,

7

Luna can you please help me figure out markup % or how to best price my 3d printers? They are $1000 up to $10,000. Thanks in advance. Please email response to courtneyrudichuk5@gmail.com.