What is a Retailer Margin?

Retailers, like brands, work on a margin, not a markup. So, if a distributor’s price (or a brand’s wholesale price if no distributor is involved) to the retailer is $3.63 and a retailer needs to make a 40% margin this means a retailer is looking to keep 40% of their total revenue. The calculation would be $3.63/(1-40%) = $6.05.

If we were you, we might shave a few pennies to make sure you land at $5.99 :wink:

Retailer margins range considerably depending on the retailer’s business model. Generally speaking, you should be safe modeling around 40% margin for grocery, frozen, and dairy items and slightly more (up to around 50%) for produce items.