Percent of retail: the closeout price shorthand
Percent of retail is a way of quoting a closeout price as a share of the goods' total retail value, for example "X% of retail." It lets buyers compare loads quickly, but it is only as good as the retail figure behind it and says nothing about freight, condition or how fast the goods will sell.
Reviewed by Tyler Kober · Updated
Key takeaways
- Percent of retail = price paid divided by total retail value of the goods.
- The retail figure must be real; a percentage of an inflated retail is a trap.
- Compare loads on cost per sellable unit and landed cost, not on the percentage alone.
What does percent of retail mean?
Percent of retail is a closeout price written as a share of the goods' total retail value. A load with a total retail value R offered at price P is quoted at P ÷ R × 100 percent of retail. It is the most common shorthand for comparing closeout prices across loads of different sizes and categories.
How it works in practice
The math is simple. In letters:
| Item | Value |
|---|---|
| Total retail value on the manifest | R |
| Price asked | P |
| Percent of retail | P ÷ R × 100 |
What makes it tricky is the retail figure. It might be MSRP, the store's ticket price, or a current online price. Each gives a different R, and so a different percentage, for the same goods at the same price P. If the manifest uses an old MSRP that is higher than today's real price, R is inflated and the load looks cheaper than it is. A careful buyer re-prices the main lines at real current prices, by exact UPC, and recalculates.
Percent of retail also ignores:
- Condition: a return and a sealed unit count the same retail.
- Freight and other costs, which belong in landed cost.
- Sell-through: slow goods tie up cash, whatever the percentage.
Example
A buyer compares two pallets offered at the same percentage. One is shelf-pull health and beauty with current retail prices and good dating. The other is untested electronics returns priced against MSRP for older models. After re-pricing at real values and removing unsellable units, the first pallet is far cheaper per sellable dollar, even though the percentages matched.
The common confusion
People assume a lower percentage is always a better deal. It is only better if the retail figure is real and the condition and freight are equal. Some sellers also quote against their own cost, not retail, so confirm the base. For how to set your own number, read what percent of retail to pay for closeouts.
Related terms
Frequently asked questions
What percent of retail should I pay for closeouts?
There is no single answer. It depends on condition, category, brand, manifest quality, lot size, freight and how you resell. New branded overstock and salvage sit far apart. Work back from what you expect to sell the goods for, minus your costs and margin, rather than starting from a target percentage.
Is percent of retail the same as cents on the dollar?
Yes, mostly. Cents on the dollar is the same idea expressed per dollar of retail: N cents on the dollar is N percent of retail. Some sellers use cents on the dollar against their cost instead of retail, so always ask which base a quote uses.
Why do sellers think in percent of retail too?
It gives both sides a shared reference. A seller can compare offers on different loads, and a buyer can compare loads of different sizes. Sellers also sometimes think in recovery against their own cost, which is a different number. Clarify the base so both sides are talking about the same thing.
Related
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