Finance Margin Calculator
Finance Margin Calculation | Digicommerce.in
If you sell on online marketplaces you will need to carry out finance margin calculations on a routine basis everyday. We make your task easier with the help of Digicommerce finance margin calculator on this page.
Using the finance margin calculator
It is easy to use the digicommerce finance margin calculation tool shown on this page. You enter cost of product and then the percentage margin you want by way of profit. Click on calculate. The margin calculator shows two results. One is the gross sale price of the product and the second is the actual profit figure in rupees based on the percentage markup you have applied to the base price.
Why do you need to calculate margins?
- If you sell on marketplaces you cannot fix a higher than prevailing price and expect customers to buy your product. This is because marketplaces typically list the same products sold by different vendors when a buyer carries out a search. You need to price products to be in line with what others are charging.
- You must know the gross profit you will earn from a sale. It should be adequate to cover the marketplaces charges you will pay.
- The margin should also be adequate to consider cost of returns and damaged products that are total write-offs.
- You also have taxes to consider, which the margin calculator does not show you but which is available elsewhere on this site.
- This margin calculator can be used in conjunction with discount calculator and GST calculator to ease the calculation processes.
Selling on marketplaces also involve other factors. For instance, you can operate on slim margins if the site you sell is one where you can sell in high volumes.
The margin you set also depends on product category. For instance if you are selling consumer products that have MRP labels you are restricted in the margin you can set. However, if you sell fashion accessories or handicrafts then it is a different matter. In such categories it is possible to have high markups, offer discounts and attract customers and even then make a handsome profit. Volume sales may be low but you make it up with higher profits.
Selling has a few considerations you need to keep in mind. You may easily overlook some or be unaware. Consult Digicommerce and take our assistance in matters of margins and pricing. We know how each marketplace operates, sales you can achieve on each and your profits.