Enter the sale price and the COGS (cost of goods sold) into the calculator to determine the retail margin percentage.

## Retail Margin Formula

The following formula is used to calculate a retail margin:

RM = (SP – COGS) / SP * 100

• Where RM is the retail margin (%)
• SP is the sale price (\$)
• COGS is the cost of goods sold (\$)

## Retail Margin Definition

What is a retail margin? A retail margin is a ratio of the net profit to the sale price of an item, typically presented as a percentage.

The term retail margin is specifically used when analyzing things that are retail businesses or operations.

## Example Problem

How to calculate a retail margin?

1. First, determine the sale price of the item.

For this example, the sale price of the item is \$100.00.

2. Next, determine the cost of goods sold.

This is the cost it took to produce or acquire the item. In this problem, the COGS was \$50.00.

3. Finally, calculate the retail margin.

Using the formula, the retail margin is found to be (100-50) / 50 *100 = 50%.