Most food producers and processors are familiar with calculating mark up. To negotiate effectively with your customers you need to understand how they calculate margin. You could be leaving many dollars on the table if you don’t understand their math.
Mark up and margin are often confused; they are not the same thing. Suppliers use mark up to ensure they achieve the desired level of profit, based on their costs. Retailers use margin percentages based on the selling price because they know what the consumer will pay and they have to charge enough to cover their costs.
The SKUFood profit wheel is a very effective tool to help you understand the difference and calculate the right answer.
Use it in a meeting a customer to really understand the cost of a discount. No more guessing!
This is one of the easiest tools to use that is portable. Take it to the store with you to calculate your competitor’s cost.
You can use it to calculate any price or margin
With the SKUFood profit wheel you can speak the language of the retailer.
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