Advanced Margin Concepts
This calculator goes beyond simple profit calculation by integrating Tax, Quantity, and Reverse Margin logic. This is essential for B2B sales, manufacturing, and retail management.
Reverse Margin Calculation
Sometimes you know exactly how much profit you need to make, but not what the price tag should say. By entering a "Target Margin" (e.g., 40%), the calculator automatically computes the Selling Price required to achieve that goal.
Tax vs. Margin
It is crucial to distinguish between Margin and Tax. Margin is your profit slice of the pie. Tax is a slice the government takes. In this calculator:
- Gross Price: What the customer pays.
- Tax Amount: Calculated based on Gross Price.
- Net Revenue: Gross Price minus Tax (actual money in your pocket).
- Margin: Always calculated based on Net Revenue (unless local laws require otherwise), ensuring you know your real profitability.
Batch Profitability
Calculating per-unit profit is vital, but knowing your Batch Totals helps with cash flow planning. If you are importing 500 units, knowing the "Total Profit" helps you determine if the shipping costs and upfront capital are worth the return on investment (ROI).