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Initial markup

Definition updated on November 2023

What is initial markup and how does it contribute to pricing strategy?

Initial markup is the difference between the cost of acquiring a pair of sneakers and the initial selling price set by the reseller. It is often expressed as a percentage of the selling price and is used to cover the operating expenses of the business and to generate a profit. For example, if a sneaker reseller acquires a pair of sneakers for $100 and sets the initial selling price at $150, the initial markup is $50 or 33.33% of the selling price. In the sneaker resell market, the initial markup can vary significantly based on factors such as the rarity, demand, and condition of the sneakers, as well as the reputation and customer base of the reseller. Therefore, setting the initial markup requires a thorough analysis of the market, including competitor prices, customer preferences, and the unique value proposition of the business. For beginners in the sneaker resell market, it is important to set the initial markup at a level that is competitive with the market, covers the operating expenses of the business, and generates a reasonable profit. Additionally, it is important to continuously monitor the market and adjust the markup accordingly to stay competitive. Ultimately, the initial markup is a crucial component of the pricing strategy of a sneaker resell business and requires careful consideration and ongoing management.

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