Initial markup or IMU

What is the significance of Initial markup or IMU in retail pricing strategies?

The Initial Markup (IMU) refers to the original difference between the cost of an item and its selling price. It's the starting point for determining the retail price of a product. For sneaker reselling, it represents the price increase from what the reseller initially paid to the price at which they aim to sell the sneaker. The IMU is often expressed as a percentage. To calculate the IMU, subtract the item's cost from its selling price and then divide that amount by the selling price. This figure is essential for resellers as it helps gauge profitability, taking into account anticipated discounts, allowances, and potential markdowns that might occur later. For instance, if a sneaker is bought for $100 and the reseller wants to price it at $150, the IMU is $50 or 33.3%. This initial markup provides insight into the potential profit before other selling expenses are considered. Understanding the IMU is vital for successful sneaker reselling as it aids in setting competitive prices while ensuring profitability.