Is the Price Right? Our Brain Squad Discusses Pricing Techniques

question:

How do you determine pricing in your store?

• Poll the salespeople how much it looks like. — Lee K., Cincinnati, OH
• We carry a curated collection with many different designers who set their own mark-up. Its uniqueness determines one-of-a-kind pieces and comparables determine kinds. — Kathleen S., Austin, TX
• We follow guidelines from Shane Decker. — Stephenie B., Fountain Hills, AZ
• Pricing is determined by establishing a baseline from Internet giants and being sure we are under that without compromising service. — J. Dennis P., Johnstown, PA
• On basic items, we’ll use standard markups. On estate goods or fine gems, we’ll look at materials, workmanship, markets and do some sight pricing. — Georgie G., Palo Alto, CA
• We have a standard markup for all goods, i.e., 3 key for lower goods, silver and gold. 2.5-2.75 for $500-$!500. 2 key for over $2,500. But, we look at an item to be sure it works for the store in those ranges, then add or subtract based on what we know our market will accept. We try to regularly push the mark-ups to see where the ceiling of a category can be pushed to. — Holly M., Astoria, OR
• Triple key on things you make yourself. Keystone on super-competitive merch like stud earrings and bracelets. Branded items: Stick to your agreements and everyone wins. — Jon B., Middleton, WI
• The Geller Blue Book for repairs and custom, traditional keystone-type markups on sales based on total retail price points. We never hesitate to add on a “coolness factor” when it’s appropriate for something made here. — David P., Durham, NC
• With some help from the Edge Retail Academy data. — Ray L., Claremont, CA
• Repairs, labor modified Geller, parts triple key. Need to break it down since Minnesota charges sales tax on parts not on labor. Merchandise anywhere from 1.4 for larger diamonds to triple key or more for items we make. Seems like the more I understand pricing, the less I know! — Edwin M., Brainerd, MN
• I am 85 percent estate, and if I can’t at least triple key, I don’t buy it. Sterling silver, I buy new and sell in-store and online at 6 to 12 key. I must buy and import many kilos at a time to accomplish this. We sell a huge volume of sterling jewelry. I have been in business for 40-plus years and stick to this method. If I can’t make a fair profit, I’d rather not work. — Medford C., North Charleston, SC
• Depends on what it is. Loose diamonds and stones are 20 percent over wholesale. We price match and beat all other retailers, especially Blue Nile. Our margins are not high. — Andrea R., El Dorado Hills, CA
• Usually a “formula” of cost x 3 (that basically works out to 1/3 costs, 1/3 labor, 1/3 overhead). With a little “what the local market will bear” thrown in. — Janne E., Cocoa, FL
• Using Balance to Buy, we look at the most popular price-points and try to fit prices to match where we can. And if some category or item constantly sells fast, we raise the price. If constantly slow, we lower the price or discontinue that item or category. — Dorothy V., Tallahassee, FL
• Interesting question. Mostly where I believe the profit line needs to be to “make it all work.” Repairs are probably our highest margin at 3 to 3.5 average. It’s always excellent work, I don’t have any reservations charging for it. I’m not a fan of any line that tells me what my markup should be, and quite frankly I tend to avoid those lines — especially in bridal and higher-end product. We are pretty much 2.8 across the board now, except some price-point fashion lines that set the retail prices. With those, I feel the volume offsets them setting the lower margin prices. This is a constantly changing thing that one always has to keep an eye on for sure. — Tom N., Spencer, IA
• We base pricing on what the market will bear. On some lower price-point items, we can have margins of keystone or better, but on higher ticket items, we focus on profit and not markup. You take dollars to the bank, not margins. — Eric S., West Springfield, MA
• Based upon a gross profit projections/budget tied to inventory management. Brands that control MSRP make it easy on that front, and then everything else must be priced to make our GP goals on a monthly/yearly basis. Inventory mix ranges from as low as 36% to 65% gross profit. — Tom D., Warren, OH
• We do a standard markup of 2x for loose gems, 2.5x for already-made jewelry, and 3x for findings. We have exceptions for each standard depending on rising interest in a stone or a style, and also if the wholesale price is over $10-15K, which we usually just double plus a little more for in case a customer tries to negotiate a price. — Rebecca L., Ketchum, ID
• We figure out what each item costs to produce, then add some profit on top of it to pay for the boss’s labor and aggravation. If it’s pre-owned (i.e., not made in the shop), we use a blindfold and a dartboard. — Gretchen S., Sherman Oaks, CA
• In my former life, I was a production cost accountant for a national vegetable company. You calculate the cost it takes to run the business, then divide it over available hours to get to your hourly cost. I never have based any of my pricing on competition. I know my cost; I have no idea on theirs. — Jo G., Oconomowoc, WI