Date:         Sun, 27 Aug 2000 18:05:44 -0500
Reply-To:     Matthew Libby & Denise DeWolfe <matandded@netway.com>
Sender:       Vanagon Mailing List <vanagon@gerry.vanagon.com>
From:         Matthew Libby & Denise DeWolfe <matandded@netway.com>
Subject:      Re: Napa does not make cooling hoses
Comments: To: Garrett Adams <gadams@jps.net>
Content-Type: text/plain; charset=us-ascii

By markup I meant how much more NAPA sells a part to the consumer than
they pay for it from the warehouse....

Matt

Garrett Adams wrote:
>
> You would need to know how they calculate their profit. Back in 1975-80 I
> managed a camera store where the method used was as a percentage of the
> sales price, not a percentage of dealer cost. When I started in the business
> I was told there were two ways for calculating profit but that the
> percentage of cost method was not as  popular.  Thus, using percentage of
> the sales price, an item  with a one-third profit which sells for $100 would
> have a net cost of $66.66. To determine your sales price you multiply your
> cost by 1.5, or just use a readily available profit wheel, a plastic device
> for quickly calculating various markups (we used 40% for most items).
>
> I admit that most consumers would look at the above example and think that
> they were seeing a 50% markup because the profit was one-half of the dealers
> cost. I suppose the percent of sales price method was favored because
> one-third doesn't sound nearly as high as one-half. Consumerism at work.
>
> Garrett Adams
> 83.5 Adventurewagen GL
> Stockton, California
>
> -----Original Message-----
> From: Vanagon Mailing List [mailto:vanagon@gerry.vanagon.com]On Behalf
> Of Bill Davidson
> Sent: Sunday, August 27, 2000 7:44 AM
> To: vanagon@GERRY.VANAGON.COM
> Subject: Re: Napa does not make cooling hoses
>
> > One more tidbit.  NAPA will negotiate on prices.  The standard mark-up
> > for NAPA is 33%, so by deducting 33%% from your quoted price you can
> > figure out what they paid, and haggle.  Most places will!
>
> Matt,
> Actually.... a 33% mark UP is equal to a 24.8% mark Down...
> Do the math and you will see..
> This counter intuitive and common mistake has lost people many fortunes :)
> Bill