Methodology
Wholesale vs Retail Channel Margin Planner methodology
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
corridorWidthExTax = reseller-compatible ceiling − supplier price floorWhere
- corridorWidthExTax
- Corridor Width Ex Tax (currency units, ex tax)Source: Calculated output
- supplierPriceFloorExTax
- Supplier Price Floor Ex Tax (currency units, ex tax)Source: Calculated output
- resellerPriceCeilingExTax
- Reseller Price Ceiling Ex Tax (currency units, ex tax)Source: Calculated output
supplierPriceFloorExTax = supplier cost stack ÷ (1 − supplier fee − supplier target margin)Where
- supplierUnitCostExTax
- Supplier unit cost (currency units/product unit, ex tax)Source: Business record
- supplierTargetMargin
- Supplier target margin (proportion of wholesale price retained by supplier)Source: User decision
- supplierPriceFloorExTax
- Supplier Price Floor Ex Tax (currency units, ex tax)Source: Calculated output
resellerPriceCeilingExTax = retail list price × (1 − reseller target margin) − reseller selling costWhere
- retailListPriceExTax
- Retail list price (currency units/product unit, ex tax)Source: Business record
- resellerSellingCostPerUnitExTax
- Reseller selling cost (currency units/product unit, ex tax)Source: Business record
- resellerTargetMargin
- Reseller target margin (proportion of retail price retained by reseller)Source: User decision
- resellerPriceCeilingExTax
- Reseller Price Ceiling Ex Tax (currency units, ex tax)Source: Calculated output
plannedSupplierContributionPerUnitExTax = planned wholesale price × (1 − supplier fee) − supplier cost stackWhere
- supplierUnitCostExTax
- Supplier unit cost (currency units/product unit, ex tax)Source: Business record
- supplierWholesaleFeeRate
- Supplier wholesale fee (proportion of wholesale price charged as supplier fee)Source: User assumption
- plannedWholesalePriceExTax
- Planned wholesale price (currency units/product unit, ex tax)Source: User decision
- wholesaleUnits
- Wholesale units (whole product units/comparison period)Source: User assumption
- plannedSupplierContributionPerUnitExTax
- Planned Supplier Contribution Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
plannedSupplierMargin = supplier contribution per unit ÷ planned wholesale priceWhere
- plannedWholesalePriceExTax
- Planned wholesale price (currency units/product unit, ex tax)Source: User decision
- wholesaleUnits
- Wholesale units (whole product units/comparison period)Source: User assumption
- plannedSupplierContributionPerUnitExTax
- Planned Supplier Contribution Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
- plannedSupplierMargin
- Planned Supplier Margin (decimal rate)Source: Calculated output
plannedResellerGrossProfitPerUnitExTax = retail list price − planned wholesale price − reseller selling costWhere
- retailListPriceExTax
- Retail list price (currency units/product unit, ex tax)Source: Business record
- resellerSellingCostPerUnitExTax
- Reseller selling cost (currency units/product unit, ex tax)Source: Business record
- plannedWholesalePriceExTax
- Planned wholesale price (currency units/product unit, ex tax)Source: User decision
- wholesaleUnits
- Wholesale units (whole product units/comparison period)Source: User assumption
- plannedResellerGrossProfitPerUnitExTax
- Planned Reseller Gross Profit Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
plannedResellerMargin = reseller gross profit per unit ÷ retail list priceWhere
- retailListPriceExTax
- Retail list price (currency units/product unit, ex tax)Source: Business record
- plannedResellerGrossProfitPerUnitExTax
- Planned Reseller Gross Profit Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
- plannedResellerMargin
- Planned Reseller Margin (decimal rate)Source: Calculated output
supplierPeriodContributionExTax = supplier contribution per unit × wholesale unitsWhere
- wholesaleUnits
- Wholesale units (whole product units/comparison period)Source: User assumption
- supplierPeriodContributionExTax
- Supplier Period Contribution Ex Tax (currency units, ex tax)Source: Calculated output
resellerPeriodGrossProfitExTax = reseller gross profit per unit × wholesale unitsWhere
- wholesaleUnits
- Wholesale units (whole product units/comparison period)Source: User assumption
- resellerPeriodGrossProfitExTax
- Reseller Period Gross Profit Ex Tax (currency units, ex tax)Source: Calculated output
supplierTargetGapPerUnitExTax = supplier contribution per unit − planned wholesale price × supplier target marginWhere
- supplierTargetMargin
- Supplier target margin (proportion of wholesale price retained by supplier)Source: User decision
- plannedWholesalePriceExTax
- Planned wholesale price (currency units/product unit, ex tax)Source: User decision
- wholesaleUnits
- Wholesale units (whole product units/comparison period)Source: User assumption
- plannedSupplierContributionPerUnitExTax
- Planned Supplier Contribution Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
- plannedSupplierMargin
- Planned Supplier Margin (decimal rate)Source: Calculated output
- supplierTargetGapPerUnitExTax
- Supplier Target Gap Per Unit Ex Tax (currency units, ex tax)Source: Calculated output
resellerTargetGapPerUnitExTax = reseller gross profit per unit − retail list price × reseller target marginWhere
- retailListPriceExTax
- Retail list price (currency units/product unit, ex tax)Source: Business record
- resellerTargetMargin
- Reseller target margin (proportion of retail price retained by reseller)Source: User decision
- resellerTargetGapPerUnitExTax
- Reseller Target Gap Per Unit 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.
- Supplier Price Floor Ex Tax
- 54.41 currency units
- Reseller Price Ceiling Ex Tax
- 58 currency units
- Corridor Width Ex Tax
- 3.59 currency units
- Planned Supplier Contribution Per Unit Ex Tax
- 17.88 currency units
- Planned Supplier Margin
- 31.9%
- Planned Reseller Gross Profit Per Unit Ex Tax
- 29 currency units
- Planned Reseller Margin
- 32.2%
- Supplier Period Contribution Ex Tax
- 8,940 currency units
- Reseller Period Gross Profit Ex Tax
- 14,500 currency units
- Supplier Target Gap Per Unit Ex Tax
- 1.08 currency units
- Reseller Target Gap Per Unit Ex Tax
- 2 currency units
The exact engine-derived outputs are shown in the labelled rows below.
Interpretation
The corridor shows whether one wholesale price can meet both the supplier and reseller margin targets 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 covers a supplier/reseller wholesale price corridor and excludes direct-versus-partner channel allocation.
- 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
- : 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.
- Channel Pricing: Protect One Product Margin
Compare channel cost stacks, contribution, cash terms and capacity on one basis without assuming identical margins or provider fees.
Read guide - Distributor Margin and Channel Conflict
Compare distributor and direct-channel contribution while making price, service, territory and cannibalisation assumptions visible.
Read guide