Supermarket margin calculator
See where the money goes between the shelf price and your bank account, and whether the listing is worth taking.
Example numbers. Replace them with yours.
Your numbers stay in your browser unless you share the link or send them to us.
Your assumptions
- Country
- United Kingdom
- Tax treatment
- Zero-rated (0%)
- Route to the retailer
- Direct to retailer
- Trade allowance basis
- % of your invoice price
- Shelf price, including tax
- £3.00
- Retailer margin, % of selling price excluding tax
- 30%
- Trade allowance, % of your invoice price
- 5%
- Share of units sold on promotion
- 30%
- Average promotional discount, % off shelf price
- 25%
- Share of the discount you fund
- 50%
- Cost of goods
- £1.10
- Logistics to the retailer’s depot
- £0.15
- Wastage and deductions, % of your invoice price
- 2%
- Other costs per unit
- £0.00
- Rate of sale, units per store per week
- 4
- Number of stores
- 200
- Weeks on sale in year one
- 52
- Listing fees, launch promotions, media, artwork and similar
- £15,000.00
- Payment terms, days
- 60
- Stock cover held, days
- 45
Your assumptions
Your listing, in numbers
Contribution after the unit costs you've entered, before fixed overheads and tax.
These numbers stack up. The next test is whether you can hit 4.0 units per store per week.
Watch the cash: you'll have more money tied up in stock and unpaid invoices than you make in year one.
- Break-even rate of sale
- 2.4 units per store per week
- Net realised revenue per unit
- £1.88
- Contribution as % of net realised revenue
- 31.4%
Where each unit’s shelf price goes
Illustrative example| Price or cost | Per unit |
|---|---|
| Shelf price including tax | £3.00 |
| Sales tax | £0.00 |
| Retailer margin | -£0.90 |
| Retailer buying price | £2.10 |
| Your invoice price | £2.10 |
| Trade allowance | -£0.11 |
| Promotional funding | -£0.11 |
| Wastage and deductions | -£0.04 |
| Cost of goods | -£1.10 |
| Logistics | -£0.15 |
| Your contribution | £0.59 (28.1% of your invoice price) |
Year one, before fixed overheads and tax
- Units sold
- 41,600
- Invoice sales
- £87,360.00
- Net realised revenue
- £78,312.00
- Contribution before launch costs
- £24,564.80
What the buyer sees: retailer margin
| Retailer margin | % of shelf price excl. tax | Per unit | Per store per week |
|---|---|---|---|
| Margin at the regular shelf price | 30.0% | £0.90 | £3.60 |
| Average margin across regular and promoted units | 26.3% | £0.79 | £3.15 |
Retailer cash margin before its own costs, rebates and deductions. Average margin allows for its share of the promotional discount.
Check the promotional unit
- Regular-price contribution
- £0.70
- Promoted-unit contribution
- £0.33
What if rate of sale changes?
Same price, terms and costs. Cash uses the same weekly run rate at each rate of sale.
| Rate of sale | Year-one units | After launch costs | Cash tied up |
|---|---|---|---|
| 2.0 (50%) | 20,800 | -£2,717.60 | £10,028.57 |
| 3.0 (75%) | 31,200 | £3,423.60 | £15,042.86 |
| 4.0 (100%) Your assumption | 41,600 | £9,564.80 | £20,057.14 |
| 5.0 (125%) | 52,000 | £15,706.00 | £25,071.43 |
Cash tied up
Money owed to you £14,400.00 + stock at cost £5,657.14.
An indicative run-rate balance of stock and unpaid invoices. It is not a cost or a peak funding forecast. Supplier credit, tax balances and cash reserves are not included.
Want a second pair of eyes on these numbers?
Take these assumptions into a conversation. You can edit or delete the summary before sending it.
Talk to Emerson GrowthHow a supermarket price breaks down
The shelf price is what the shopper pays. It is not what your brand receives. Start by removing any VAT or GST, then take off the retailer’s margin. If a distributor sits between you and the retailer, its margin comes out next. What remains is your invoice price.
From that invoice, allow for trade allowances, your share of promotional discounts and wastage or deductions. Then subtract the cost of making and moving the product. The result is contribution: the amount left towards fixed overheads and tax. It is not net profit. Enter any additional unit cost, including financing, under Other costs without repeating costs already counted.
Margin vs markup: 30% is not 30%
Margin is measured against the selling price. Markup is measured against the buying price. A retailer selling at £3 excluding VAT with a 30% margin keeps 90p and buys at £2.10. Its markup on that buying price is 42.9%, not 30%.
The same distinction matters with a distributor. A 40% distributor margin is 40% of its selling price to the retailer. It is not a 40% markup on what it pays you. This wholesale pricing formula works backwards through the chain so each percentage uses the right base.
Remove VAT or GST before calculating margins
A tax-inclusive price is the price before tax multiplied by one plus the tax rate. To reverse it, divide. For standard-rated UK VAT, a £5 shelf price divided by 1.20 gives £4.17 excluding VAT. Taking 20% off the shelf price would give £4.00 and understate the amount available to the chain.
At 10% Australian GST, divide by 1.10. Many foods are zero-rated in the UK or GST-free in Australia, while exceptions depend on the product and how it is sold. Use the country guidance beside the tax field and check your own product’s treatment. The country switch changes currency and tax options; it does not convert your numbers.
Why rate of sale matters
A good unit margin does not guarantee a good listing. Rate of sale, the number of units each store sells in a week, drives total contribution. Multiply it by stores and weeks on sale to work out year-one units. Then deduct the one-off costs of launching. The break-even rate shows what those launch costs need, at the unit contribution you entered.
Promotions can increase volume while reducing what you keep per unit. This tool averages the funding cost across the promotional share you enter. It does not forecast extra sales. Check the promoted-unit result as well as the average, and use the sensitivity table to see what slower sales would do.
Cash needs a separate look. Stock and unpaid invoices can absorb more cash than year one contributes. The estimate here uses weekly sales and your payment and stock days. It excludes supplier credit and seasonal peaks, so use it to start a cash conversation rather than as a funding forecast.
Does this calculate my net profit?
It calculates contribution after the unit costs you enter, before fixed overheads and tax. Year one also deducts your one-off launch costs. Add any other unit costs, including financing if relevant, in Other costs.
Can I compare a direct listing with a distributor?
Yes. Choose Through a distributor and enter its margin on its selling price to the retailer. Switching back to Direct removes that deduction. Review logistics and payment terms yourself: the calculator never changes them automatically.
What does the promotional funding calculation assume?
It multiplies the share of units on promotion by the discount on the shelf price excluding tax and the share of that discount you fund. Trade allowance and wastage are separate. It does not assume a promotion will increase sales.
Why does the cash estimate not fall when I reduce weeks on sale?
It is a weekly run-rate balance. Payment terms and stock cover determine the stock and receivables needed at that sales pace. Weeks on sale changes year-one sales and contribution, not the weekly balance.
Are my inputs saved or sent anywhere?
The calculator runs in your browser. Country is in the query string and the numbers are in the link’s fragment, which is not sent to the server. Copying a link shares those numbers. The contact button puts an editable summary in the form; it sends only when you submit.
Illustrative tool. Real retailer terms vary by retailer, category and negotiation. This is not financial advice. Your numbers stay in your browser unless you share the link or send them to us.