How to calculate product margin

It's no secret that the price of goods in retail is different from the wholesale. And the wholesale and retail price, in turn, differs from the purchase price and so on, up to the cost of the goods. In this regard, a simple human question arises: what is the margin? How to calculate the markup on the product?

Instruction manual

1

Of course, to calculate all this is real, but with many reservations. First of all, you need to know that the trade margin varies depending on the direction of activity, that is, on the type of goods sold. So, for example, an alcohol premium of less than 30% is not practiced. As for food, here we can confidently talk about a trade margin of 25%, and for wholesalers - 10%.

2

According to statistics, last year the margin on goods in retail chains ranged from 16 to 30%.

3

Taking into account the above information, you can use elementary calculations using a calculator and subtract the estimated amount of interest from the purchase price. Thus, you will receive a purchase price that is closer to the cost of goods. Keep in mind that the larger the retail chain, the lower the trade margin, and vice versa, the smaller the seller, the higher the margin.

4

The ideal option for calculating the trade margin is the method when the purchase price is known. Then, you subtract the purchase price from the purchase price and get the mark-up amount in absolute terms or just in money. To understand the percentage equivalent of the trade allowance, take the purchase price and divide it into the purchase price. Subtract the unit and multiply by 100. This time you got the calculation of the markup in relative terms.

5

Now you have at your disposal a set of tools with which it is possible to independently calculate the trade margin