Question

A retailer has noticed that his cost of goods from a specific supplier always seem to be increasing—affecting the gross profit on the items. What are some steps a retailer could take?
Grin and bear it—the supplier sets the prices!
Ask the supplier for an explanation for the price increases.
Change suppliers or quit carrying the item(s) from this supplier.
Keep raising retail price of the item(s) to compensate for the price increases from the supplier.

Answer 1

The action that the  retailer could take is that He or she can ask the supplier for an explanation for the price increases and then he can Keep raising retail price of the item(s) to compensate for the price increases from the supplier.

What brings an increase in gross profit margin?

A retailer can experience an increase in the sales volume and this is one that can lead to a reduction in the cost of goods sold based on the fixed manufacturing cost per unit is said to be  smaller as production volume is getting bigger.

An increase in sales is known to be one that is followed by a decrease in cost of goods sold per unit that therefore leads to a higher gross profit margin.

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