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faq:price_code_calculations_how_does_the_markup_calculation_work_margin_retail_tab [2011/09/01 14:32]
tanya
faq:price_code_calculations_how_does_the_markup_calculation_work_margin_retail_tab [2011/09/01 14:37] (current)
tanya
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 ===== Markup Calculations ===== ===== Markup Calculations =====
-A markup calculation is a calculation that does its math from "the bottom up". This means that it refers to the dollar value increase as a percentage of cost. The 2 codes that use the markup calculation style are W and L. The cost used is different for each one. W uses base cost, and L uses actual costs otherwize ​known as the landed cost.+A markup calculation is a calculation that does its math from "the bottom up". This means that it refers to the dollar value increase as a percentage of cost. The 2 codes that use the markup calculation style are W and L. The cost used is different for each one. W uses base cost, and L uses actual costs otherwise ​known as the landed cost.
  
  
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-==== Explenation ​====+==== Explanation ​====
 The 100% markup scenario is a great example because most retailers know that a 100% markup is double the price. You can think of the calculation of markup as a way to compare the cost to the increase in terms of a percentage. The 100% markup scenario is a great example because most retailers know that a 100% markup is double the price. You can think of the calculation of markup as a way to compare the cost to the increase in terms of a percentage.
  
-A common mistake in the calculation can happen if you are used to thinking about things in terms of percentage of cost. if I have a cost of $100 and a price of $300 it is intuative ​to say that the price is cost x 300%. The problem with that is that the markup is only 200%. Test it using the formula above. Please look at our price code X for this type of calculation.+A common mistake in the calculation can happen if you are used to thinking about things in terms of percentage of cost. if I have a cost of $100 and a price of $300 it is intuitive ​to say that the price is cost x 300%. The problem with that is that the markup is only 200%. Test it using the formula above. Please look at our price code X for this type of calculation.
  
  
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 ===== Margin Calculations ===== ===== Margin Calculations =====
-A margin calculation is a calculation that does its math from “the top down”. This means that it refers to the dollar value increase as a percentage of retail. The 2 codes that use the margin calculation style are H and M. The cost used is different for each one. H uses base cost, and M uses actual costs otherwize ​known as the landed cost. +A margin calculation is a calculation that does its math from “the top down”. This means that it refers to the dollar value increase as a percentage of retail. The 2 codes that use the margin calculation style are H and M. The cost used is different for each one. H uses base cost, and M uses actual costs otherwise ​known as the landed cost. 
  
  
faq/price_code_calculations_how_does_the_markup_calculation_work_margin_retail_tab.txt · Last modified: 2011/09/01 14:37 by tanya