1. What is Resale Margin?

Resale margin is the percentage difference between the purchase price and resale price of an item, relative to the resale price. It measures profitability in resale transactions.

2. How Does the Calculator Work?

The calculator uses the resale margin formula:

Where:

• \( Resale\ Price \) — Final selling price in USD
• \( Purchase\ Price \) — Original purchase price in USD

Explanation: The formula calculates what percentage of the resale price is profit after accounting for the original purchase cost.

3. Importance of Margin Calculation

Details: Calculating resale margin helps businesses and individuals understand profitability, set appropriate pricing strategies, and evaluate the success of resale operations.

4. Using the Calculator

Tips: Enter both prices in USD. The resale price must be greater than 0, and purchase price should be 0 or positive. For best results, use actual transaction values.

5. Frequently Asked Questions (FAQ)

Q1: What's a good resale margin?
A: This varies by industry, but generally margins above 20-30% are considered good for most resale businesses.

Q2: How is this different from markup?
A: Markup is calculated relative to purchase price, while margin is calculated relative to selling price.

Q3: Can margin be negative?
A: Yes, if you sell an item for less than you paid for it, the margin will be negative indicating a loss.

Q4: Should I include other costs?
A: For more accurate profitability analysis, consider including additional costs like shipping, fees, or labor in your purchase price.

Q5: How often should I calculate margin?
A: Regular margin analysis (monthly/quarterly) helps track business performance and identify pricing issues.