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Inspiring
July 25, 2007
Question

Math Guru Needed Badly

  • July 25, 2007
  • 4 replies
  • 1257 views
Hello, I am really dumb at math equations so I need some help... I need help with cost / markup and final price calculations...

Say I have an Item that wholesales for $50.00 and my markup is 25% ... I know how to get my profit margin price by taking:
the equation is: cost/((100-margin)/100) = selling price
50.00/((100-25)/100) = $66.66666666 ...

Where i really run into problems is when my markup is over 100% then my equation goes down the crapper...

For instance: when I run the equation with a 125% markup I get -12.5 and this obviously cannot be correct... Sooooooooo... Does anyone out there have any clue how to solve this problem by using markups that are larger than 100%....

Thanks so much for anyone who can help, and those that try... :o)

    This topic has been closed for replies.

    4 replies

    Inspiring
    July 28, 2007
    this sort of pathetic, shameless attempt at self-advertising is
    disgusting...
    and then you go and do it in another thread, too!!!

    believe you me, having a link to your website posted in these forums,
    even if picked up by search spiders, DOES NOT count as a good external
    link and WILL NOT help you with your page/search results rankings, if
    that is what you are counting on...

    i mean, if your site was any good, or contained any cf advice/tutorials
    or just anything cf-related (apart from that it was built in cfml), then
    mentioning it here might have been justified....



    ---
    Azadi Saryev
    Sabai-dee.com
    http://www.sabai-dee.com
    Participant
    July 28, 2007
    Hi

    I think this might help out

    look at www.itkong.com
    Inspiring
    July 27, 2007
    As Ian said, markup and margin are two different things.
    The easiest way to get the selling price using markup would be something
    like this:

    Cost: $50
    Markup: 25%
    Formula: Cost * 1.Margin = Selling Price

    Selling Price: 50*1.25 = $62.50

    --
    Bryan Ashcraft (remove BRAIN to reply)
    Web Application Developer
    Wright Medical Technology, Inc.
    -------------------------------------------------------------------------
    Macromedia Certified Dreamweaver Developer
    Adobe Community Expert (DW) :: http://www.adobe.com/communities/experts/


    "bweno" <webforumsuser@macromedia.com> wrote in message
    news:f8817j$hjg$1@forums.macromedia.com...
    > Hello, I am really dumb at math equations so I need some help... I need
    > help
    > with cost / markup and final price calculations...
    >
    > Say I have an Item that wholesales for $50.00 and my markup is 25% ... I
    > know
    > how to get my profit margin price by taking:
    > the question is: cost/((100-margin)/100) = selling price
    > 50.00/((100-25)/100) = $66.66666666 ...
    >
    > Where i really run into problems is when my markup is over 100% then my
    > equation goes down the crapper...
    >
    > For instance: when I run the equation with a 125% markup I get -12.5 and
    > this
    > obviously cannot be correct... Sooooooooo... Does anyone out there have
    > any
    > clue how to solve this problem by using markups that are larger than
    > 100%....
    >
    > Thanks so much for anyone who can help, and those that try... :o)
    >
    >
    >


    BKBK
    Community Expert
    Community Expert
    July 27, 2007
    There are two ways to define the markup margin: markup on sale price, also called retail markup, and markup on cost, also known as profit margin.

    Suppose the markup is m %. Then the respective formulas are:

    1) markup on sale price
    sale price = cost * 100/(100 - m)
    For example, with cost = $50 and m=25%, sale price = $50 * 100/(100 - 25) = $5000/75 = $66.67

    2) markup on cost
    sale price = cost * (100 + m)/100
    For example, with cost = $50 and m=25%, sale price = $ 50 * (100 + 25)/100 = $6250/100 = $62.50

    There is a difference between the two markup definitions. For the markup on sale price, the value of m must be non-negative and less than 100. Whereas, for the markup on cost, the value of m, the so-called profit margin, may be any real number, positive or negative. As previous posters have said, you'll be mixing the two if you call the markup on sale price the profit.


    Inspiring
    July 25, 2007
    I'm not an expert here but I think you have some of your definitions off
    here. It looks like you may be mixing up markup percentage and profit
    margin percentage which are separate numbers; using this page as a
    reference [ http://www.dinkytown.net/java/ProfitMargin.html

    I think what you may be looking for is a simple formula like this.

    salePrice = wholeSale + wholeSale * markup.
    IE [62.5 = 50 + 50 * .25]
    Which means your profit margin would be: 20%

    Then your second use case would be:
    112.5 = 50 + 50 * 1.25
    Which would have a profit margin of: ~56%

    You can't have a profit margin of over 100%. Unless somebody paid you
    to sell their product and you kept all the sales or as you got - you
    have a negative wholesale price.