How to calculate margin on products ?

Dull71

New Member
Joined
Apr 7, 2011
Messages
2
Lets say i want a high margin on low prices and a lower margin on high prices ?

Example.
up to 10 i want 3.2
up to 30 i want 3.0
up to 60 i want 2.8
up to 100 i want 2.6
up to 150 i want 2.5
up to 200 i want 2.4
up to 300 i want 2.0
up to 500 i want 1.8
above 500 i want 1.5

How should this formula be made, and how can i avoid that a price of 59 will cost more then a price 61 when i call for the margin ?

Im totally new to excel, but was told this can be done.
 

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Matty

Well-known Member
Joined
Feb 17, 2007
Messages
3,710
Welcome to the Board!

If I follow correctly, you want a set up like this:

<table style="font-family: Arial,Arial; font-size: 10pt; background-color: rgb(255, 255, 255); padding-left: 2pt; padding-right: 2pt;" border="1" cellpadding="0" cellspacing="0"> <colgroup><col style="font-weight: bold; width: 30px;"><col style="width: 61px;"><col style="width: 62px;"><col style="width: 19px;"><col style="width: 64px;"><col style="width: 64px;"><col style="width: 93px;"></colgroup><tbody><tr style="background-color: rgb(202, 202, 202); text-align: center; font-weight: bold; font-size: 8pt;"><td>
</td><td>A</td><td>B</td><td>C</td><td>D</td><td>E</td><td>F</td></tr><tr style="height: 17px;"><td style="font-size: 8pt; background-color: rgb(202, 202, 202); text-align: center;">1</td><td>Price</td><td>Margin %</td><td>
</td><td>Product</td><td>Price</td><td>Price + Margin</td></tr><tr style="height: 17px;"><td style="font-size: 8pt; background-color: rgb(202, 202, 202); text-align: center;">2</td><td style="text-align: right;">£0.01</td><td style="text-align: right;">3.2</td><td>
</td><td>Pan Set</td><td style="text-align: right;">£59.00</td><td style="text-align: right;">£60.65</td></tr><tr style="height: 17px;"><td style="font-size: 8pt; background-color: rgb(202, 202, 202); text-align: center;">3</td><td style="text-align: right;">£10.01</td><td style="text-align: right;">3</td><td>
</td><td>Toaster</td><td style="text-align: right;">£61.00</td><td style="text-align: right;">£62.59</td></tr><tr style="height: 17px;"><td style="font-size: 8pt; background-color: rgb(202, 202, 202); text-align: center;">4</td><td style="text-align: right;">£30.01</td><td style="text-align: right;">2.8</td><td>
</td><td>TV</td><td style="text-align: right;">£500.00</td><td style="text-align: right;">£509.00</td></tr><tr style="height: 17px;"><td style="font-size: 8pt; background-color: rgb(202, 202, 202); text-align: center;">5</td><td style="text-align: right;">£60.01</td><td style="text-align: right;">2.6</td><td>
</td><td>Laptop</td><td style="text-align: right;">£501.00</td><td style="text-align: right;">£508.52</td></tr><tr style="height: 17px;"><td style="font-size: 8pt; background-color: rgb(202, 202, 202); text-align: center;">6</td><td style="text-align: right;">£100.01</td><td style="text-align: right;">2.5</td><td>
</td><td>
</td><td>
</td><td>
</td></tr><tr style="height: 17px;"><td style="font-size: 8pt; background-color: rgb(202, 202, 202); text-align: center;">7</td><td style="text-align: right;">£150.01</td><td style="text-align: right;">2.4</td><td>
</td><td>
</td><td>
</td><td>
</td></tr><tr style="height: 17px;"><td style="font-size: 8pt; background-color: rgb(202, 202, 202); text-align: center;">8</td><td style="text-align: right;">£200.01</td><td style="text-align: right;">2</td><td>
</td><td>
</td><td>
</td><td>
</td></tr><tr style="height: 17px;"><td style="font-size: 8pt; background-color: rgb(202, 202, 202); text-align: center;">9</td><td style="text-align: right;">£300.01</td><td style="text-align: right;">1.8</td><td>
</td><td>
</td><td>
</td><td>
</td></tr><tr style="height: 17px;"><td style="font-size: 8pt; background-color: rgb(202, 202, 202); text-align: center;">10</td><td style="text-align: right;">£500.01</td><td style="text-align: right;">1.5</td><td>
</td><td>
</td><td>
</td><td>
</td></tr></tbody></table>
The formula in F2 is:

=E2*INDEX(B$2:B$10,MATCH(E2,A$2:A$10,1))/100+E2

Note that you will always have an issue with this where the higher price is just over a margin threshold, e.g. the Laptop being cheaper than the TV, even though the price without the margin added was cheaper.

Does this help?

Matty
 

Dull71

New Member
Joined
Apr 7, 2011
Messages
2
Thanks Matty,

Indeed this is close to what im after.
Is there no way to make the margin "floating" between the thresholds, so the prices go between 3.2 on a low price and closer to 3 at the new breakpoint, just to avoid the pricing problem at breakpoint.

I´m greatful for the help I can get.
 

shg

MrExcel MVP
Joined
May 7, 2008
Messages
21,782
Office Version
  1. 2010
Platform
  1. Windows
You could use an exponential pricing model.

Code:
       --A-- --B-- -----C----- -------------------D-------------------
   1         First         3.3 C1: Input                              
   2          Last         1.7 C2: Input                              
   3             K 0.005151455 C3: Input                              
   4                                                                  
   5   Input Yours   Formula                                          
   6      10  3.2        3.23  C6: =C$2 + (C$1-C$2) * (1-C$3) ^ (A6-1)
   7      30  3.0        3.08                                         
   8      60  2.8        2.88                                         
   9     100  2.6        2.66                                         
  10     150  2.5        2.44                                         
  11     200  2.4        2.27                                         
  12     300  2.0        2.04                                         
  13     500  1.8        1.82
First is the price (or markup) you'd charge for a single unit.

Last is the price (or markup) if you sold a zillion.

k is a parameter that controls how fast the price decreases.
 

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