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Methodology

Minimum Order Value Planner methodology

Solve an order floor after fixed and percentage costs.
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

Minimum Order Value Ex Tax
minimumOrderValueExTax = (fixed cost stack + target contribution) ÷ (1 − percentage cost rate)

Where

fixedOrderCostExTax
Fixed order cost (currency units/order, ex tax)Source: Business record
targetContributionExTax
Target contribution (currency units/order, ex tax)Source: User decision
minimumOrderValueExTax
Minimum Order Value Ex Tax (currency units, ex tax)Source: Calculated output
fixedCostStackExTax
Fixed Cost Stack Ex Tax (currency units, ex tax)Source: Calculated output
contributionAtMinimumExTax
Contribution At Minimum Ex Tax (currency units, ex tax)Source: Calculated output
Fixed Cost Stack Ex Tax
fixedCostStackExTax = fixed order cost + delivery cost + fixed payment fee

Where

fixedOrderCostExTax
Fixed order cost (currency units/order, ex tax)Source: Business record
deliveryCostExTax
Delivery cost (currency units/order, ex tax)Source: Business record
paymentFeeFixedExTax
Fixed payment fee (currency units/order, ex tax)Source: Business record
fixedCostStackExTax
Fixed Cost Stack Ex Tax (currency units, ex tax)Source: Calculated output
Percentage Costs Ex Tax
percentageCostsExTax = minimum order value × total percentage cost rate

Where

minimumOrderValueExTax
Minimum Order Value Ex Tax (currency units, ex tax)Source: Calculated output
percentageCostsExTax
Percentage Costs Ex Tax (currency units, ex tax)Source: Calculated output
Contribution At Minimum Ex Tax
contributionAtMinimumExTax = minimum order value − fixed stack − percentage costs

Where

minimumOrderValueExTax
Minimum Order Value Ex Tax (currency units, ex tax)Source: Calculated output
percentageCostsExTax
Percentage Costs Ex Tax (currency units, ex tax)Source: Calculated output
contributionAtMinimumExTax
Contribution At Minimum Ex Tax (currency units, ex tax)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.

Minimum Order Value Ex Tax
67.24 currency units
Fixed Cost Stack Ex Tax
20.3 currency units
Percentage Costs Ex Tax
31.94 currency units
Contribution At Minimum Ex Tax
15 currency units

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

Interpretation

The order threshold covers the fixed order-cost stack, percentage costs and required contribution entered.

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 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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