How to Give a Margin on a Suggested Retail Price

An item's sale price is marked up to make a profit.

The manufacturer's suggested retail price (MSRP) is a specific amount the manufacturer recommends a retailer charge for a certain product. The MSRP exists to create standard prices, keeping manufacturers and retailers for different stores competitive and equal while keeping prices reasonable for consumers. Despite receiving an MSRP, retailers still have a choice as to what price they will set a product at to make a profit while remaining competitive. Most retailers give a margin on suggested retail prices.

Instructions

1. Calculate all costs associated with selling the product. Include the price of buying the product from the manufacturer wholesale, shipping costs and labor costs.

2. Subtract your chosen margin from 100 percent. For example, if you decide on a 30 percent margin, calculate 100 - 30 = 70.

3. Divide the total cost from Step 1 by your result in Step 2. For example, if the total cost of your product is $500, multiply 500 by 70 percent, or 500 / .70 = $714.29; $714.29 is the selling price at a 30 percent margin.

Tips & Warnings

• Repeat this process for any chosen margin. For example, if you chose a 20 percent margin instead of a 30 percent margin, simply calculate 100 - 20 = 80 and proceed using this number.

References

• CSG Network; Retail Margin and Markup Table