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Methodology

Channel Pricing Comparison Planner methodology

Compare the contribution your business retains from direct and partner routes.
Duc Nguyen X.By Duc Nguyen X.· Founder, Margin101Last reviewed: View update historyMethodology

Educational only: Business decision support, not accounting, tax or legal advice.

Privacy: Calculations run locally; Margin101 does not receive your commercial inputs.

Update policy: Reviewed when formulas or official dependencies change.

Scope: Market-neutral small-business planning using your own assumptions.

1. Formulas and units

Partner Contribution Delta Ex Tax
partnerContributionDeltaExTax = partner period contribution − direct period contribution

Where

directUnits
Direct units (whole product units/comparison period)Source: User assumption
partnerUnits
Partner units (whole product units/comparison period)Source: User assumption
partnerContributionDeltaExTax
Partner Contribution Delta Ex Tax (currency units, ex tax)Source: Calculated output
directContributionPerUnitExTax
Direct Contribution Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
partnerContributionPerUnitExTax
Partner Contribution Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
directPeriodContributionExTax
Direct Period Contribution Ex Tax (currency units, ex tax)Source: Calculated output
partnerPeriodContributionExTax
Partner Period Contribution Ex Tax (currency units, ex tax)Source: Calculated output
Direct Contribution Per Unit Ex Tax
directContributionPerUnitExTax = direct price × (1 − direct commission) − direct fixed fee − product cost − direct service and fulfilment

Where

unitProductCostExTax
Product cost (currency units/product unit, ex tax)Source: Business record
directPriceExTax
Direct price (currency units/product unit, ex tax)Source: User decision
directFixedFeePerUnitExTax
Direct fixed fee (currency units/product unit, ex tax)Source: Business record
directServiceAndFulfilmentCostPerUnitExTax
Direct service and fulfilment (currency units/product unit, ex tax)Source: Business record
directUnits
Direct units (whole product units/comparison period)Source: User assumption
directContributionPerUnitExTax
Direct Contribution Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
Partner Contribution Per Unit Ex Tax
partnerContributionPerUnitExTax = partner price × (1 − partner commission) − partner fixed fee − product cost − partner service and fulfilment

Where

unitProductCostExTax
Product cost (currency units/product unit, ex tax)Source: Business record
partnerPriceExTax
Partner price (currency units/product unit, ex tax)Source: User decision
partnerFixedFeePerUnitExTax
Partner fixed fee (currency units/product unit, ex tax)Source: Business record
partnerServiceAndFulfilmentCostPerUnitExTax
Partner service and fulfilment (currency units/product unit, ex tax)Source: Business record
partnerUnits
Partner units (whole product units/comparison period)Source: User assumption
partnerContributionPerUnitExTax
Partner Contribution Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
Direct Contribution Margin
directContributionMargin = direct contribution per unit ÷ direct price

Where

directPriceExTax
Direct price (currency units/product unit, ex tax)Source: User decision
directUnits
Direct units (whole product units/comparison period)Source: User assumption
directContributionPerUnitExTax
Direct Contribution Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
directContributionMargin
Direct Contribution Margin (decimal rate)Source: Calculated output
Partner Contribution Margin
partnerContributionMargin = partner contribution per unit ÷ partner price

Where

partnerPriceExTax
Partner price (currency units/product unit, ex tax)Source: User decision
partnerUnits
Partner units (whole product units/comparison period)Source: User assumption
partnerContributionPerUnitExTax
Partner Contribution Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
partnerContributionMargin
Partner Contribution Margin (decimal rate)Source: Calculated output
Direct Period Contribution Ex Tax
directPeriodContributionExTax = direct contribution per unit × direct units − direct allocated channel cost

Where

directUnits
Direct units (whole product units/comparison period)Source: User assumption
directAllocatedChannelCostExTax
Direct allocated channel cost (currency units/comparison period, ex tax)Source: Business record
directContributionPerUnitExTax
Direct Contribution Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
directPeriodContributionExTax
Direct Period Contribution Ex Tax (currency units, ex tax)Source: Calculated output
Partner Period Contribution Ex Tax
partnerPeriodContributionExTax = partner contribution per unit × partner units − partner allocated channel cost

Where

partnerUnits
Partner units (whole product units/comparison period)Source: User assumption
partnerAllocatedChannelCostExTax
Partner allocated channel cost (currency units/comparison period, ex tax)Source: Business record
partnerContributionPerUnitExTax
Partner Contribution Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
partnerPeriodContributionExTax
Partner Period Contribution Ex Tax (currency units, ex tax)Source: Calculated output
Partner Units To Match Direct
partnerUnitsToMatchDirect = ceil((direct period contribution + partner allocated cost) ÷ partner contribution per unit)

Where

directUnits
Direct units (whole product units/comparison period)Source: User assumption
partnerUnits
Partner units (whole product units/comparison period)Source: User assumption
directContributionPerUnitExTax
Direct Contribution Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
partnerContributionPerUnitExTax
Partner Contribution Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
directPeriodContributionExTax
Direct Period Contribution Ex Tax (currency units, ex tax)Source: Calculated output
partnerPeriodContributionExTax
Partner Period Contribution Ex Tax (currency units, ex tax)Source: Calculated output
partnerUnitsToMatchDirect
Partner Units To Match Direct (operational units)Source: Calculated output
Partner Price To Match Direct Ex Tax
partnerPriceToMatchDirectExTax = required partner retained revenue per unit grossed up for partner commission

Where

directPriceExTax
Direct price (currency units/product unit, ex tax)Source: User decision
directUnits
Direct units (whole product units/comparison period)Source: User assumption
partnerPriceExTax
Partner price (currency units/product unit, ex tax)Source: User decision
partnerUnits
Partner units (whole product units/comparison period)Source: User assumption
partnerUnitsToMatchDirect
Partner Units To Match Direct (operational units)Source: Calculated output
partnerPriceToMatchDirectExTax
Partner Price To Match Direct Ex Tax (currency units, ex tax)Source: Calculated output
Partner Price To Match Direct State
partnerPriceToMatchDirectState = reachable when the exact matching price is non-negative and partner volume is positive; otherwise unreachable

Where

directPriceExTax
Direct price (currency units/product unit, ex tax)Source: User decision
directUnits
Direct units (whole product units/comparison period)Source: User assumption
partnerPriceExTax
Partner price (currency units/product unit, ex tax)Source: User decision
partnerUnits
Partner units (whole product units/comparison period)Source: User assumption
partnerUnitsToMatchDirect
Partner Units To Match Direct (operational units)Source: Calculated output
partnerPriceToMatchDirectExTax
Partner Price To Match Direct Ex Tax (currency units, ex tax)Source: Calculated output
partnerPriceToMatchDirectState
Partner Price To Match Direct State (decision state)Source: Calculated output

Money inputs and outputs use the currency selected in the scenario without changing the canonical methodology. Rates, margins, utilisation and buffers are entered as percentages and converted to decimal values for calculation.

2. Worked example

Input assumptions

The worked rows below come directly from the registered engine and visible default fixture.

Calculation and outputs

Example

The worked rows below come directly from the registered engine and visible default fixture.

Direct Contribution Per Unit Ex Tax
43 currency units
Partner Contribution Per Unit Ex Tax
22.75 currency units
Direct Contribution Margin
43%
Partner Contribution Margin
26.8%
Direct Period Contribution Ex Tax
15,200 currency units
Partner Period Contribution Ex Tax
12,650 currency units
Partner Contribution Delta Ex Tax
-2,550 currency units
Partner Units To Match Direct
713
Partner Price To Match Direct Ex Tax
90 currency units
Partner Price To Match Direct State
Reachable

The exact engine-derived outputs are shown in the labelled rows below.

Interpretation

The channel result compares what your business retains after each route-specific price and full cost stack.

3. Validation and boundary checks

  • All inputs must be finite and within the visible validation boundaries.
  • Rates use decimal values below 100%; whole-unit thresholds round upward only where the engine names that rule.
  • All compared monetary inputs use one consistent ex-tax basis and planning period.

4. Assumptions and source classification

  • Every cost, price, fee and volume is supplied by the user; no market benchmark is inferred.
  • Indirect tax is excluded from retained commercial economics unless a dedicated input explicitly models it.
  • The engine retains full precision and display formatting never feeds back into calculation.

This planner has no current policy-data dependency. Its commercial assumptions are user supplied. Registered family-level regression suites exercise the shared business-logic engine and worked-result reconciliation.

5. Limitations

  • The model covers the business’s retained channel contribution and excludes reseller target-margin economics.
  • The model does not forecast demand, competitor response, supplier negotiation outcomes or capacity.
  • It does not replace accounting, tax, legal or financial advice.

This is educational decision support, not tax, accounting, legal or financial advice. Check the treatment of your actual transactions under the rules that apply to your business and seek qualified advice where appropriate.

6. Update and evidence policy

Registered family-level suites test formula invariants and example reconciliation; the release ledger records that coverage without claiming a separate oracle for every line of public copy. There is no official threshold or benchmark to refresh for this planner. Commercial inputs remain user-supplied because they vary by business and contract.

Change history

  1. : Initial public release of the planner and methodology after pre-launch calculation, content, source and interaction review.

Related reading

Guides to interpret the decision and its assumptions.

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