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In the field of buying and merchandising, the concepts of cost mark-up and retail mark-up are central to pricing decisions, profit calculations, and merchandising strategies. Both represent methods of adding a margin to the base figure of cost or price, but the distinction lies in the base on which the mark-up is calculated. Understanding these differences is essential for effective retail operations, as it affects both the retailer’s profitability and the way prices are communicated to consumers. Cost mark-up refers to the amount added to the cost price of a product to determine its selling price. In this method, the retailer begins with the actual cost of acquiring the merchandise, which includes the purchase price from the supplier, transportation costs, duties, and sometimes handling charges. Once the total cost is calculated, the retailer adds _______ ___ ________ _________ _______ ___ __________ ________ _______ ____ __________.
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