Consumer goods markups

Goals

To understand the markup rates for wholesale and retail for condoms, tampons, heart-rate monitors and baby formula.

Early Findings

Condoms

  • According to one article, the markup rate for condoms is 354%. For the Trojan brand, retail is reportedly $4.63 while wholesale runs at $1.02 for a pack of 3.
  • China Brands lists 100 condoms for wholesale of $1.09.
  • Reportedly, Costco only marks up its items 8-10%.
  • Information from the United Nations Population Fund is helpful in identifying 'true' prices, as this NGO is likely charged close to cost price. The UNPF purchases condoms at $0.025 apiece and it states the market value is $0.50. That's an incredible 20x in value.
  • Apparently, the manufacturing (cost) price for off-brand condoms is only 2-3 cents per unit.
  • One wholesale has 1,000 Trojan condoms for $279. This means they are being sold at $0.279 per unit, which is still a significant markup. However, off-brand condoms wholesale for as low as $60/1,000, which is $0.06 per unit.
  • An industry expert made a reference to manufacturer Karex previously selling their condoms at $0.03/ea, which represented 20% net profit. This fits in previous data that manufacturing costs are generally 2-3 cents each.

Summary of Early Findings

  • One article states the condom markup rates from wholesale to retail is 354%. However, this is going to greatly depend on the wholesale deal found and the retailer's pricing.
  • The markup from manufacturer to retail could be as high as 2,000% (UNPF data of 2.5 cents cost price up to 50 cents retail per unit).
  • Other sources corroborate the fact that manufacturing cost price of condoms is around 2-3 cents each. Wholesale markups vary depending on branded versus off-brand. One brand of condoms had a markup of 930% (3 cents manufacturing cost estimate to $279/1,000). Off-brand condoms have an estimated wholesale markup of 300% (2 cents manufacturing cost estimate to $60/1,000).
  • Retail markup is going to vary greatly, depending on volume and retailer. More bulk units will of course be cheaper. Planned Parenthood states condoms retail for "about a dollar each". If we assume this to be for national brands, this means markup is around 3,333% (3 cents estimated manufacturing costs to $1.00 each) from manufacturing cost to retail. If we use the $279/1,000 units wholesale, then retail to wholesale markup is around 358%, which matches data from a previous source.

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