Enter the cost of goods ($) and the markup ($) into the Calculator. The calculator will evaluate the Price to Retailer.
Price to Retailer Formula
PTR = COG + MU
Variables:
- PTR is the Price to Retailer ($)
- COG is the cost of goods ($)
- MU is the markup ($)
To calculate Price to Retailer, sum the cost of goods and the markup.
How to Calculate Price to Retailer?
The following steps outline how to calculate the Price to Retailer.
- First, determine the cost of goods ($).
- Next, determine the markup ($).
- Next, gather the formula from above = PTR = COG + MU.
- Finally, calculate the Price to Retailer.
- After inserting the variables and calculating the result, check your answer with the calculator above.
Example Problem :
Use the following variables as an example problem to test your knowledge.
cost of goods ($) = 500
markup ($) = 60
Frequently Asked Questions
What is markup in retail pricing?
Markup is the amount added to the cost price of goods to cover overhead and profit. It is the difference between the cost to produce or purchase goods and their selling price.
How do you determine an appropriate markup for your products?
Appropriate markup can be determined by considering factors such as the cost of goods, market competition, target profit margins, and customer willingness to pay. It often varies across different industries.
Is there a difference between markup and margin?
Yes, there is a difference. Markup is calculated based on the cost of the goods, while margin is calculated based on the selling price. Margin shows the percentage of revenue that is profit, after covering the cost of goods.
Can the Price to Retailer vary significantly between products?
Yes, the Price to Retailer can vary significantly between products due to differences in cost of goods, markup strategies, and market positioning. Luxury items, for example, often have higher markups than everyday consumer goods.
