Your Results
Required Wholesale Price
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The price your brand needs to sell the product for to the distributor or retailer to meet all margin targets.
Maximum Allowable COGS
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The highest Cost of Goods Sold per unit your brand can have while still achieving all desired margins.
Brand Wholesale Margin per Unit
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The dollar amount your brand earns per unit sold at the calculated wholesale price.
Retailer Gross Profit per Unit
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The dollar amount the retailer earns per unit sold at the target retail price.
How This Calculator Works
This tool calculates your maximum allowable Cost of Goods Sold (COGS) and required wholesale price by starting with a target retail price and desired retail margin percentage. It works backward to ensure all costs are covered while meeting retailer profit expectations and your brand's margin goals.
When to Use This Tool
A major grocery chain offers to carry your new plant-based yogurt but demands a 38% retail margin.
The tool reveals your maximum allowable COGS and required wholesale price, helping you quickly assess if the deal is profitable given your current production costs.
Your primary ingredient supplier announced a 15% price increase, impacting your product's COGS.
Input the new COGS to see what adjustments are needed to your wholesale price or if you need to negotiate with retailers to maintain your desired brand margin.
You are launching a new line of frozen meals and need to set a competitive retail price while ensuring profitability across the supply chain.
Work backward from a target retail price and desired margins for all parties to determine your optimal wholesale price and the COGS you must achieve.
Common Questions
How do I account for a distributor in the calculation?
If you sell through a distributor, input their margin percentage in the 'Distributor Margin %' field. The tool will factor this into the required wholesale price you need to sell to the distributor.
What if my actual COGS is higher than the 'Maximum Allowable COGS'?
This indicates your current cost structure won't meet the target retail price and margins. You'll need to either reduce your COGS, negotiate a lower retail margin, or increase the retail price to achieve profitability.
Can I use this tool to compare different retail partners?
Yes, by inputting each retailer's specific margin requirements and your target retail price, you can compare the resulting wholesale prices and COGS to see which partnership offers better profitability for your brand.
Does the 'Maximum Allowable COGS' include my brand's overhead costs?
No, the 'Maximum Allowable COGS' is specifically for direct product costs (ingredients, packaging, labor). Your brand's desired wholesale margin should account for overhead, marketing, and overall company profit.
Price for Profit. Every Retailer. Every Product.
Guidance provides expert tools and resources to help CPG food brands make informed pricing decisions and optimize their profitability across all sales channels.
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