Profit margin = (Revenue - cost)/ Revenue
Partner or individual Pricing Assignment:
You are opening a new school store at Isfeld. You have to determine 3 products that you think would be good potential products in order to make money for the school. I want you to find these products at wholesale prices and then set the retail price for each product.
Answer the following questions with regard to your task.
Why and how did you decide on the products you decided to put into the school store? Please explain the quality level of these products whether each is a high, medium , or a low end product.
Determine a pricing strategy ( refer to pricing strategies handout) for each of the 3 products and explain why you chose the particular strategy to price your products. Make sure you clearly state all of your costs including shipping and taxes. You may include taxes in your price when you sell retail.
List the wholesale and retail cost for each product as well as the profit margin for each product.
If you sold 100 of each product, determine the dollar value profit you would make on each product and the total profit of all of the products combined.
Example: Bought a 24 pack of muffins from Costco for 10.99. Each muffin costs approx .46 cents.
At the school store, we will sell half a muffin for .75 cents.
Profit will be 48 x .75 = $36.00 ( total sales if all muffins are sold) - 10.99 (Cost of muffins for 24
Profit margin = (Revenue - cost)/ Revenue
Then figure out how much you would make on 100 24 packs of muffins.
100x 36.00= $3,600 total gross sales
100x 25.01= $2,501
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