Choose margin, revenue, or cost, then enter the two displayed values. Use matching periods and cost scope.

Find the share of revenue remaining after costs.

Use revenue and included costs for the same period. Excluded expenses still reduce profit.

Related Calculators

Distributor Margin Formula

The distributor margin is the percentage of revenue left after subtracting the distributor cost. The calculator can solve for margin, revenue, or cost when you enter the other two values.

DM = ((R - C) / R) × 100
R = C / (1 - DM / 100)
C = R × (1 - DM / 100)
  • DM = distributor margin, as a percentage
  • R = distributor revenue, in dollars
  • C = distributor cost, in dollars

If you enter revenue and cost, the calculator finds the distributor margin. If you enter cost and margin, it finds the revenue needed to achieve that margin. If you enter revenue and margin, it finds the maximum cost that fits that margin.

Illustrative Distributor Margin Bands

The table illustrates amounts remaining per revenue dollar. These bands are not verified industry benchmarks or recommended targets; excluded expenses must still be covered.

Distributor Margin General Interpretation Common Situation
Under 10% Less than $0.10 per revenue dollar Actual profitability depends on excluded expenses
10% to 25% From $0.10 to $0.25 per revenue dollar Illustrative band; no industry rating implied
25% to 40% From $0.25 to $0.40 per revenue dollar Illustrative band; no industry rating implied
Over 40% More than $0.40 per revenue dollar Illustrative band; no industry rating implied

Margin Compared With Markup

Distributor margin and markup are related, but they are not the same. Margin is based on revenue. Markup is based on cost.

Measure Formula Based On
Distributor margin ((Revenue - Cost) / Revenue) × 100 Revenue
Markup ((Revenue - Cost) / Cost) × 100 Cost

Example Calculations

Example 1: Calculate distributor margin

You have distributor revenue of $10,000 and distributor cost of $7,000.

DM = (($10,000 - $7,000) / $10,000) × 100
DM = 30%

The distributor margin is 30%.

Example 2: Calculate required revenue

You have distributor cost of $4,500 and want a distributor margin of 25%.

R = $4,500 / (1 - 25 / 100)
R = $6,000

You need distributor revenue of $6,000 to reach a 25% margin.

FAQ

What is a good distributor margin?

An appropriate margin depends on product, volume, contract terms, and included costs. There is no universal good-margin threshold. Expenses excluded from the cost input, such as selling, storage, shipping, financing, and overhead, must still be covered.

Is distributor margin the same as gross margin?

Distributor margin is a type of gross margin when it compares distributor revenue with the distributor’s cost of goods. It does not automatically include every business expense unless those expenses are included in the cost value you enter. If you only enter product acquisition cost, the result is a product-level margin, not a full net profit margin.

Why does the calculator divide by revenue instead of cost?

Margin is calculated as a percentage of revenue, so the formula divides profit by revenue. Markup divides profit by cost. For example, buying a product for $70 and selling it for $100 gives a 30% margin, but the markup is about 42.86%.