[RetailEdge Moderator]

The margin in the RetailEdge reports and on the inventory price calculator is a retail calculation defined as:

Margin = 1 - (Cost/Retail). Since the selling price in RetailEdge is Price 1 and the inventory is calculated based on average cost, this calculation is really: Margin = 1 - (Average Cost/Price 1).

So an item that has an average cost of $1.00 and a Price 1 of $2.00, would have a margin of 1 - (1.00/2.00) = .50 or 50% margin.


Some people are more familiar with the term Markup ("I want to have a 200 % markup").

Markup = (Total/ Original) − 1 or in RetailEdge terms Markup = (Price 1/Average Cost) - 1. So in the above example, the Markup would be (2.00/1.00) - 1 or a 100% markup.

To convert markup to margin.
1/(1-Margin) = Price1/Average Cost = Markup + 1, so

Margin = 1- (1/(Markup + 1))

Listed below are some common values to give you a baseline on how the margin relates to markup.

Margin Markup
16.67% 20.00%
33.33% 50.00%
50.00% 100.00%
60.00% 150.00%
66.67% 200.00%
75.00% 300.00%