oss profit margin according to demand. Items that have a high turnover will have a lower mark-up than items with a lower turnover.Premium PricingPremium pricing is where the retailer introduces a large gross profit margin and sells everything at a relatively expensive price. This method is only useful if the store image suites the price, i.e. if the store looks classy and prestigious. For this pricing method to work, many other value adding methods must be used.High-Low PricingWhen stock arrives, its gross profit margin is set relatively high. As time goes by, the gross profit margin is lowered and the stock is cleared out. This is especially useful for fashion items where the clothes are only good for one season.Every Day Low PricingThere is a low gross profit margin set on all the products. All the items are priced as close to the wholesale price as possible. This method relies on a high turnover and is generally only used in supermarkets. For this method to work, generally other value adding areas are forfeited, i.e. customer service.DiscountingThis is where products are offered at a lower than average price. The gross profit margin is low and the items offered are generally of a poorer quality. This method is often used for factory seconds or end of line clearances. For this method to work, it must coincide with the retail brand, much like the Premium pricing method only at the opposite end of the scale.ConclusionThere are many areas to investigate when a retail outlet is organized. All of these areas must be investigated and for optimum sales a right mix of each must be used. When setting up a retail store, research must be done so that the retail brand matches the store image, pricing strategy and feeling and the retail store must adhere to the customers wants and needs. For a retailer to succeed, the store must be perfect because if their store is not perfect, another one will be and that store will succeed....
