I buy by the carton and sell by the piece; how do I calculate the margin?

The mistake that produces meaningless numbers

You buy a carton of 48 juice boxes for 240 and sell each box for 12. Type 240 as the cost and 12 as the price, and the Profit margin calculator shows a loss of 228 and a margin of -1900%. The calculator is not wrong; you compared a whole carton with a single box.

The right way

1. Divide the carton price by the number of pieces: 240 ÷ 48 = 5 per box.
2. Enter 5 as the cost and 12 as the price.
3. The result: profit of 7 per box, margin 58.33%, markup 140%.

If it is easier to think in cartons, enter the carton price as the cost and what you collect from selling every box as the price: 240 against 12 × 48 = 576. The margin is the same 58.33%, with 336 profit on the whole carton.

Do not divide by everything in the carton

Not every piece in a carton reaches a customer. Some boxes get dented in transit, some pass their date before they sell, and you may open one or two for tastings or samples. If you expect 4 boxes per carton to go unsold, divide by 44, not 48.

The small gap between 54.58% and 54.55% comes from rounding the box cost to 5.45. For the exact figure, work at carton level or enter the cost with more decimal places.

Details that change the cost per piece

• Delivery of the cartons to you: if you pay freight on the order, spread it over the pieces and add it to the cost.
• Different carton sizes from different suppliers: before choosing where to buy, compare the real price per piece with the Unit-price comparison.
• Volume discounts: a lower carton price when you buy ten changes the cost per piece. Recalculate at the new price.
• When to order the next carton: a margin is no use if you run out of stock. Work out your reorder point with the Inventory reorder-point calculator.