What is Profit Surcharge
Due to increasing competition within the market and rise in operations costs which saw shipping costs increase by 20% recently by Hong Kong Post Office, and the increases of operating cost in China, we will be enforcing a new policy in regards to our existing markup pricing policy. With effect on December 1, 2013, the following policy will be enforced:

1. For any markup on shipping fees, we will retain 50% of the markup amount.

2. For any markup on products exceeding 10% of the base price, the profit calculations will be as follows:

Messenger Bag Base Price: $20.00
Markup: $3.00
Markup Percentage: 15%
Sale Price: $23.00
Profit earned: 3 x (1-0.15) = $2.55

Blanket Base Price: $30.00
Markup: $9.00
Markup Percentage: 30%
Sale Price: $39.00
Profit earned: 9 x (1-0.3) = $6.30

Blanket Base Price: $30.00
Markup: $13.50
Markup Percentage: 45%
Sale Price: $43.50
Profit earned: 13.5 x (1-0.45) = $7.425

The maximum surcharge will be 50% regardless of how much you markup your designs. For markups 10% or less, no surcharge will be applied.

We hope you understand this change in policy has been enforced to encourage store owners to markup their prices at a manageable level. In the long run, the competitive pricing will boost your sales levels and profits. We hope we can overcome the short-term difficulties, and enhance our competitive capacity for ongoing successful online business.