Trend Analysis

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In the retail industry there are numerous uncontrollable external influences that affect profitability and a retailer's ability to produce profit. Being able to establish the “right” price is vital in the delicate process of generating revenues to sustain business operations. In order to be successful a retailer must utilize an effective retail pricing strategy. The retailer must account for the costs associated with the products. Two key elements in factoring product cost is the cost of goods and the amount of operating expenses. What sets Trends Fashion apart from other retail locations is its unique consignor/consignee retail strategy, which allows them to cover the cost of obtaining the goods plus the expenses related to operating the business. The wide range of products offered by Trend requires an efficient pricing strategy in terms of pricing lines and pricing ranges. Trend is able to calculate a selling price on used clothing no matter what item it is through the following simple equation ½ x (Price of Buying New) - (25%). In terms of manufacturer’s suggested retail prices of inventory, Trend Fashion maintains it’s pricing through this equation. The pricing range of inventory received through consignment is also established through the use of this equation and is utilized in their pricing line. The pricing line of items is set through categorizing the items by type and the level of fashion. There are three different pricing levels for each category of products, low, medium, and high end. The subsequent chart is the current pricing strategy utilized by Trend Fashions pricing line and pricing ranges:

Category| Level| Price ($)| Category| Level| Price ($)| Category| Level| Price ($)| Dresses| HighMediumLow| 402515| Shorts| HighMediumLow| 252515| Tanks| HighMediumLow| 18158| Category| Level| Price ($)| Category| Level| Price ($)| Category| Level| Price ($)| Shirts| HighMediumLow| 302015| Capris| HighMediumLow| 302520| Pants| HighMediumLow| 352520| Category| Level| Price ($)| Category| Level| Price ($)| Category| Level| Price ($)| Jeans| HighMediumLow| 603520| Workout Pants| HighMediumLow| 201510| Coats| HighMediumLow| 403020| Category| Level| Price ($)| Category| Level| Price ($)| Category| Level| Price ($)| Winter coats| HighMediumLow| 755030| Hats| HighMediumLow| 252015| Runners| HighMediumLow| 352520| Category| Level| Price ($)| Category| Level| Price ($)| Category| Level| Price ($)| Boots| HighMediumLow| 804025| Heels| HighMediumLow| 453025| Shoes| HighMediumLow| 352520| Category| Level| Price ($)| Category| Level| Price ($)| Category| Level| Price ($)| Purses| HighMediumLow| 402515| High end purses| HighMediumLow| 17510060| Tunics| HighMediumLow| 302015| Category| Level| Price ($)| Category| Level| Price ($)| Category| Level| Price ($)| Hoody’s/zippers| HighMediumLow| 403020| Sweaters| HighMediumLow| 403020| High end Denim| HighMediumLow| 14010075| * The average price of an item at Trend Fashion is approximately $25. In an ever competitive retail industry retailers must make sure to keep mark-ups on inventory high enough to cover price reductions, discounts, shrinkage and other anticipated expenses, and still achieve a satisfactory profit. Trend Fashions large product selection allows them to retain sixty percent off all consignment sales. The key to Trend’s success is its unique business model. Being a consignment store in the retail industry allows for virtually zero inventory costs. Any item given for consignment has been marked down based on the category and level of fashion. Trend Fashion focuses on pleasing the customer while maintaining a high margin. In order to do this, Trend utilizes a 60/40 split with the consignor and a 50/50 split with its Very Important Consignors (V.I.C.). Trend Fashion gives its consignors the choice of receiving...
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