Many luxury sheets cost less than $200 to make but sell for more than $500 in retail stores. Some cost even more– consumers pay almost $3,000 for Frett'e "Tangeri Pizzo" king-size luxury linens. The creators of a new brand of luxury linens, called Boll? & Branch, have entered this market. They want to price their sheets lower than most brands but still want to earn an adequate margin on sales. The sheets come in a luxurious box that can be reused to store? lingerie, jewelry, or other keepsakes. The Boll & Branch brand touts fair trade practices when sourcing its high-grade long-staple organic cotton from India.
The company calculated the price to consumers to be $380. If the company decides to sell through retailers instead of directly to consumers online, to maintain the consumer price at $380, at what price must it sell the product to a wholesaler who then sells it to retailers Assume wholesalers desire a 12 percent margin and retailers get a 15 percent margin, both based on their respective selling prices.