EP 032 | Profit Through Margins Not Markups with Veronica Solomon
November 1, 2017
About this Episode
Markup. It’s such a dirty word, and yet we need the income that comes from that revenue stream. In this podcast, we’ll share how we maximize our margins when purchasing products and trades.
In this episode we learn:
– a new language for dealing with the reality of markups
– specific strategies for pricing
– to increase profitability with decent margins on goods and labor
– how to hone your confidence as a business owner
Veronica’s entire business turned around when she tapped into her core confidence. She suggests role playing and even talking to yourself in front of the mirror to practice asking for money or reading your contract without flinching. It gets easier over time.
Veronica’s contract states:
Merchandise to be purchased by Client from Designer will be specified in a written “Furniture Proposal” prepared by Designer and submitted in each instance to Client for approval. Each proposal will describe the item and its specified price to Client. The specified price of each item shall be the manufacturer’s suggested retail price (MSRP) less thirty five percent (35%) of any discount that we receive, where the discount is greater than twenty (20%), plus any applicable delivery, insurance, handling charges and sales tax. We cannot guarantee the lowest prices for the same products, neither are we obligated to research the lowest prices or price match sales, markdowns or discounts available elsewhere. We make every attempt to provide you with the best pricing based on our costs. No item can be ordered by Designer until the Proposal has been approved by Client, in writing, and returned to Designer with the required initial payment as set forth in the Proposal. The required deposit is equal to seventy five percent (75%) of total budget. The balance of the Specified Price, together with delivery and insurance charges and applicable taxes, is payable when the item is ready for delivery to and/or installation at project site, or to a third-party for further work upon rendition of our invoice. Proposals for fabrics, wallpaper, accessories, antiques and items purchased at retail stores require full payment at time of signed Proposal, and are subject to an additional $50 per hour in design fees for the procurement and project management phase. Proposals that have been approved by Client in writing are non-cancelable unless stated otherwise or agreed to in writing by Designer.
An example of how Veronica calculates:
Sofa MSRP is $1200
Designer Net Cost $ 500
Designer Discount $ 700
65% of Discount of $700 $ 455
35% of Discount amount $ 245
Cost to Client – Net Cost plus 65% of discount $500 + $455 = $955
Client pays $955 for sofa and saves $245.
Designer makes $455
Legal Disclosure | This podcast is for educational purposes only and should not be used for any legal decisions. Kimberley Seldon Design Group, Kimberley Seldon Productions Inc., Kimberley Seldon Design and Media, Inc., Business of Design™, or any of its affiliated companies or staff is not responsible for any errors or omissions effecting accuracy in any content, and they will not be held liable for the use or misuse of information, facts, details or any other aspects should there arise any defects, errors, omissions or perhaps inaccuracies. Extensive research has been conducted to put this podcast together for the purpose of educating our industry in order to better serve the public. Care has been taken to acknowledge ownership of copyrighted material. The advice and strategies contained herein may not be suitable for every situation. This work is offered with the understanding that we do not render any legal, accounting or other professional advice. Seek the advice of a lawyer and/or other competent professional person in all matters of law. Further, listeners should be aware that internet websites mentioned may change or disappear between when this was recorded and when it was listened to.