How do you calculate gross profit on wholesale pricing?

2 replies
Example

Minimum Advertised Price: $11.99
Pieces Per Case: 6
Suggested Retail Price Piece: $13.99
Price per case: $54.99
Price per piece: $9.10


Price it sells for on Amazon: 11.01 Merchant Fulfilled or 14.59 FBA


Product Dimensions: 4 x 6 x 7 inches ; 1.6 ounces
Shipping Weight: 1.6 ounces
#calculate #gross #pricing #profit #wholesale
  • Profile picture of the author onSubie
    Googling your subject line, this thread is the Number 2 result.

    Number one is this calculator....

    Profit Margin Calculator
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    • Profile picture of the author Steve B
      Gross profit margin = revenue generated minus the cost of goods sold divided by the revenue generated. (Cost of goods sold, cogs, is generally materials and labor, but does not include operating expenses).

      In your case:

      gross profit margin = revenue (I'm assuming you're selling at $13.99 x 6 pieces) = $83.94
      cost of goods sold = $54.99

      Plugging these numbers into the formula: $83.94 - 54.99 / $83.94 = .3448 or 34.5%

      gross profit margin (if you sell at full suggested retail price) is 34.5%

      If you sell at the minimum advertised price ($11.99), your gross profit obviously goes way down.

      $71.94 - 54.99 / $71.94 = .2356 or 23.6%

      Both these equations don't include considerations for shipping the item. If you don't charge the customer for the full shipping/handling cost, your gross profit goes down even more.

      Good luck to you,

      Steve
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