Use this template to better understand and meaningfully define trade margins in multi-level distribution.
Trade margins in multi-level sales channels may seem trivial, but they are not. As a manufacturer of products, you know your manufacturing costs and your marketing and distribution costs. You may also know the price end customers are willing to pay (list price). But what margin for wholesalers and what margin for retailers or craftsmen can your product handle in between? Are the possible margins attractive enough for the sales partners to sell your products and not your competitors’ products? What should you optimize about your manufacturing costs?
If you are a specialist wholesaler, you are interested in whether you can be successful in terms of price with products from a particular manufacturer with your resellers – retailers or craftsmen.
The open Excel file shows – based on a list price for end customers – the margin distribution between manufacturer, specialist wholesaler and retailer/tradesman. For operational trading, it is interesting to see what markups can be applied to purchase prices.
For controlling in retail, it is important to compare the contribution margin resulting from this margin with the variable costs.
Finally, in order to understand and neatly plan prices along the entire sales chain, it is necessary to define the discounts from the list price for the individual trade levels.
The small, ready-deformed Excel file allows you to find answers to all these questions.
- As a manufacturer, you get a template that you can use to plan trade margins in multi-level sales channels.
- As a product developer at a manufacturer, you learn how expensive your new product may be in order to be successfully marketed in multi-level sales channels (target pricing)
- As a wholesaler, you gain an insight into the sales opportunities of products from specific manufacturers.
- As a buyer in the specialized wholesale trade, you will receive arguments for your price negotiations with manufacturers.
- As a retail buyer, you will gain insights for your procurement.
- As a startup entrepreneur, you can tell if your product is competitive in multi-level sales channels.
After ordering, you will receive a download link to the template, which you can use immediately.
Please note that this template, to which you purchase access, is for your personal use only. It is prohibited to resell the artwork in any form and in any digital or physical way or to publish it in any physical or online publication without my permission. I am the only copyright owner of this file.
Link to download: MS Excel document