You will often hear the recommendation to markup your products with 3x.

If you pay $10 for a product, you will sell it for $30.

The 3x markup is a good rule of thumb.

• 1/3 goes to pay the vendor for the products’ cost

• 1/3 goes to cover your operational expenses (rent, salaries, marketing, etc.) and

• 1/3 is your profit

Sometimes you may not be able to mark up your product with 3x.

For example, some brands may set a recommended retail price that only allows a 2x markup. In that case, evaluate if the products will help bring customers to your business, who will buy your other products. You can then treat the lower markup products as a marketing expense.

If the products you buy do not allow for an 3x markup, because the price then gets too high for your customers, it’s generally a good idea to evaluate your vendors.

If you cannot make a profit, you will most likely not be in business for long. That’s not what you or your customers want.