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Ensure all your employees know how to properly mark up or develop pricing to achieve desired profit margins. Test them and hand out examples of how to calculate markups and mark pricing to earn targeted profits. Never assume your employees understand this critical part of sales.
For example, to teach an employee how to price a product to get a desired gross profit margin, do the following. To get a 30% gross profit margin, with costs of $75.00, assume that the cost must be (1.0 – .30 = .70 or 70% of the selling price. If the cost is $75.00, divide the cost by its % or $75.00/(1-.30) = selling price $107.14 each unit.
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