How to Calculate Retail Profit Margin Returns
If you sell a movie for $15 in your store and a board game for $35, the prices alone do not accurately measure which sale makes you more money. In fact, even knowing the profit doesn't tell you which sale is more profitable. Instead, use the profit margin, which measures the retail profit as a percentage of the selling price. To calculate the retail profit margin return, you need to know the amount you pay for the item and the amount you sell it for.
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Instructions
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Divide the cost of the retail item by the sales price. For example, if you purchase an item for $14 and sell it for $35, divide $14 by $35 to get 0.4.
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Subtract the result from 1 to find the margin as a decimal. In this example, subtract 0.4 from 1 to get 0.6.
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Multiply the margin as a decimal by 100 to convert the margin to a percentage. In this example, multiply 100 by 0.6 to get a 60 percent retail margin.
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