Business
Distributor Margin Calculator
Enter wholesale cost, retail price and distributor cut % to see each tier’s margin.
Distributor and retail margins
Distributor and retailer margins share the gap between factory wholesale and shelf retail. Enter wholesale cost, retail price and the percentage of that spread the distributor keeps; the tool sets the distributor’s sell-on price as wholesale plus their share, then reports each tier’s cash margin and margin percent. A 40% distributor cut of a £18 spread is £7.20 on top of wholesale, leaving the rest for the retailer. Contracts often quote markup, list-less or landed costs differently — translate into wholesale, retail and cut before trusting the percentages. For single-tier pricing see wholesale price and gross margin.
Worked example
Wholesale £12, retail £30 → spread £18. 40% cut → distributor sell-on £19.20; distributor margin on sell-on ≈ 37.5%; retailer margin ≈ 36%.
Limits and assumptions
Ignores rebates, marketing funds and returns. One cut rate for the whole spread.
Frequently asked questions
What is a distributor cut?
Here it means the share of the retail-minus-wholesale spread that the distributor keeps as their gross take before the retailer marks up to shelf price.
Is margin the same as markup?
No. Margin is profit as a share of selling price; markup is profit as a share of cost. This page reports margin % on each tier’s selling price.
What if retail is below wholesale?
The spread is negative — fix pricing before interpreting margins.
Can I model two distributors?
Run the tool twice with intermediate transfer prices, or split the cut manually.