Retailer margin is the margin added to the cost of a product by a retailer.
Retailer Margin Formula and Example
Below is a simple calculation for calculating the profit margin of a product. Additional resource links follow the example.
Let’s say you are a retailer who sells electronic goods. One of your products includes a video game console which costs you $200. In order to cover your costs and make a profit, and stay competitive with other retailers in the areas selling the same game unit, you set a margin of 20%.
To calculate the retailers margin for the above example, follow this simple formula:
$200 / (100% – 20%) = Selling Price
$200 / (80%) = Selling Price
$200 / .80 = $250
The first thing you do is subtract 20% from 100% which gives you 80%
Then you convert the percentage into a decimal, which 80% converts to .80
Finally, you divide $200 by .80 or .8 and your final answer is $250
You would sell your video game unit for $250.
For more information on calculation retailer margin and other retail calculations, visit the following sites:
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