Use the following formula:
MSRP − Cost Price = Gross Margin
- MSRP (Manufacturer Suggested Retail Price) is the price at which you intend to sell your product to the end consumers.
- Cost Price is the total cost of producing your product, including manufacturing, labor, materials, and overheads.
Available Margin = Gross Margin − Other Expenses- Other Expenses include additional costs like transportation, packaging, storage, financing, marketing, and any hidden costs like damages or losses.
Distributor Margin = Available Margin × Distributor Share Percentage- Distributor Share Percentage is the agreed-upon percentage of the available margin that the distributor will receive. This percentage is negotiated between the manufacturer and the distributor.
