Product Markups Analysis

In order to develop markup information, the group first identifies all of the significant distribution channels through which a given appliance or type of equipment passes from the manufacturer to the purchaser. For example, a manufacturer may sell equipment to a purchaser through a national account. Or, a manufacturer may sell equipment to a wholesaler, who in turn sells it directly to the purchaser. A manufacturer also may sell the equipment to a wholesaler, who in turn sells it to a mechanical contractor, who in turn may sell it directly to the purchaser or through a general contractor who may sell it and its installation to the purchaser. Often, distribution channels for new and replacement markets differ. The manufacturer selling price (MSP) estimates are converted to purchaser prices, using cost multipliers developed from analyses of distribution channel markups.

In addition to developing these markups, the group includes sales tax data to calculate final equipment prices. These final purchaser prices for equipment at differing efficiency levels then can be used to estimate life-cycle costs (LCC), payback periods (PBP), and analyses of various impacts at national, state, and other geographic levels for a range of considered policy options.