Wholesale and Retail Markup Rates-Tampons
Using top manufacturer's annual reports to determine profit margins of the feminine care segment, we can assume that overall tampon markups for both retail and wholesale is 38%-48% including company profit and sales tax. Details of condom markups and tampon statistics have been provided below.
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.
- 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.
Tampons Market Costs
- In general, 10% of the cost of feminine products goes to goods and services tax (GST). This is because the government considers feminine hygiene products as non-essential and, therefore, still charge tax.
- In most states, customers pay 30-50 cents per box of tampons to state tax amounting to $100 to $225 during their entire menstrual lifecyle just in tax.
- An estimate of $275 million per year is spent in tampon tax alone in the United States.
- In 2015, a study was released that found that women's products cost an average of 7% more than men's products.
- The United States charges 2x-6x more for feminine products than any other country, however, Mexico is expected to have the highest 5-year growth rate of 16.8% CAGR.
Tampon Mark Up Rate
- After scouring industry reports, media publications, news articles, and company websites, we were unable to find any information that accurately provide precompiled mark up rates for tampons globally or by region. We then attempted to find the cost of manufacturing tampons to calculate the mark up value using the average retail cost of a box of tampons. This search did not provide any details either. Finally, we identified the top manufacturers of tampons globally. We then identified Edgewell Personal Care Co as a public company that provides financial data to the public. We used their 2018 annual report to determine the following data:
- In 2018, Edgewell Personal Care Co generated global profit margins from feminine care products of 38%. In the same year, the feminine care segment represented 15% of the company's total revenue amounting to $351.6 million USD.
- If we assume that the remaining revenue was lost due to operational costs, we can use the segment profit as a proxy we can assume that tampons are marked up by 38%. Unfortunately, there is no data publicly available to calculate markup value specific to retail and wholesale.