Summary
This article describes how margin, margin percent, adjusted margin
Applies To
All skus in StockIQ
Process
Margin
Margin refers to the amount of profit margin made due to sales of a part.
It is calculated according to the following formula:
Margin = Revenue - Cost of Goods Sold (aka COGS)
A per-unit margin for an item can be calculated by comparing its price and cost:
Per-Unit-Margin = Price - Cost
When doing calculations for classing, this distills down to using the fields from the ItemSite data feed:
Per-Unit-Margin = Standard Price - Standard Cost
Margin Percent
Margin Percent is a related calculation showing the percent margin for the item:
Margin Percent = (Revenue - COGS) / Revenue
Adjusted Margin and Adjusted Margin Percent
Finally, in terms of inventory management, a useful metric can be the adjusted margin and adjusted margin percent. This is the margin calculated including the effects of holding cost, so:
Adjusted Margin = Margin - (Holding Cost For a given Quantity)
And therefore:
Adjusted Margin Percent = (Revenue - HoldingCost - Cogs) / Revenue
Landed Margin
Landed Margin is margin with consideration to tariffs, duties, other taxes, and freight costs
Landed Margin = Standard Price - Landed Cost
Adjusted Landed Margin
Adjusted Landed Margin is landed margin with further margin subtracted by the expected holding cost of your order quantity that is remaining by the time this order arrives. If your adjusted margin is negative, StockIQ will warn you that this purchase may in fact cost you money instead of making it.
Adjusted Margin = Landed Margin - Expected Holding Cost