CRSP App (An app to set Retail Selling Price)

LIM Chee Kong
14 April 2015

What is Retail Selling Price (RSP)?

  • It is the price that consumers pay when they buy a product from a retailer.

  • Among the 4 Ps of the Marketing Mix, it is the only revenue, whereas the rest are costs.

  • Despite the widespead use of barcode to automatically set the RSP of an item for many stores of a retailer, manual setting of RSP is necessary at the store level, particularly for a supermarket that retails meats, fruits and vegetables.

Why setting RSP, using this Shiny App, is important?

  • Barcoding for meats, fruits and vegetables is difficult because they come in different grades, cuts and sizes.

  • The quality for these items deteriorates as time passes.

  • The forms and quality of the items affect the gross profit margin, which is used to calculate the RSP.

  • This App calculates the RSP for retail staff who don't know the formula, and reduces human error.

How to set Retail Selling Price?

The commonly used method to set RSP is the Markup pricing method, which divides the cost price by the difference between one and the desired gross profit margin

RSP <- function(costprice, grossprofitmargin) {
    costprice/(1-grossprofitmargin)
  }
RSP(8, 0.2)
[1] 10

If an item is bought at $8 (cost price), and the retailer wants to earn a gross profit margin of 20% (0.2), the RSP will be $10.