Formula for Determining Cost Based on Target Markup and Target Retail

1. Formula for Determining Cost Based on Target Markup and Target Retail

I'm trying to figure out if we can meet the costs needed by a potential retailer based on their target markup and target retail, but can't figure out the formula. I've done this a lot with target margin from a retailer, but not target markup.

If their target retail is \$50, and their target markup is 60%, what is the formula I need to determine the cost they expect from us?

2. Re: Formula for Determining Cost Based on Target Markup and Target Retail

Hi protcg,

You need to divide the \$50 by 1.6 which equals \$31.25. If it was a 25% markup you would divide it by 1.25, 5% by 1.05 etc.

Hope this helps.

Regards,

Snook

3. Re: Formula for Determining Cost Based on Target Markup and Target Retail

I feel silly now, thank you! I was over-complicating it.

4. Re: Formula for Determining Cost Based on Target Markup and Target Retail

Don't worry about it I've been there myself. Best to check and get it right.

Regards,

Snook

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