Initial markup or IMU

Retailers and e-commerce companies utilize initial markup, or IMU, as a pricing strategy to establish a product's starting price based on targeted profit margin and cost of goods sold (COGS). It is computed by raising the product's price by a certain percentage, known as the markup. For instance, if a product's production costs are $10 and a 50% markup is intended, the starting price would be $15 ($10 + ($10 x 50%)).Retailers and e-commerce companies frequently utilize this pricing technique as a starting point for selecting prices, particularly for new products or when the cost of goods fluctuates. It enables companies to stay competitive in the market by accounting for their expenses and targeted profit margin. Because changes in the cost of items might have an impact on the profit margin, IMU can also be used to alter prices over time. To keep the same profit margin, the markup % will rise in tandem with the cost of goods.To make sure that prices are competitive and in line with market trends, initial markup, or IMU, can also be used in conjunction with other pricing strategies including price elasticity, market pricing, and competitor price indexing.