Setup Business in UAE Blog

How do I calculate the profit margin?

Hello, so I’m planning to start an import/Export Business soon. I have looked up everything, the papers you need, if the market is good, etc. and everything is fine. First, I want to start by exporting goods to another country. I know you have to calculate the prices, but how to I calculate my own profit margin?

| 👁 820 | Posted November 24, 2018 | Share on Facebook | Twitter | Google+

| Modified: November 24, 2018 | Author:


Mrpjackson 11 months ago

Sale price 3500 - cost of goods sold 2000 =1500 gross profit Gross profit 1500 divides by selling price 3500 =42.8% gpm

dgillz 11 months ago

It sounds like your real question is "How much should I charge?" You should charge what the market will bear. Profit margin is a very simple calculation, Price - Cost.

cherishperish 11 months ago

Okay, so my problem now is to calculate the revenue. I have to add all expenses to my product, but at the end, I want to profit from it. How do I calculate the profit itself? Especially if it's a B2B product, I don't know the price of the competitors.

reformedAR 11 months ago

Take your total revenue (money paid for your product/service) and subtract your total expense (how much it cost you to make/sell/deliver your product or service) If this is a negative number you are not making money (profit) and will go out of business.

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