I would like to know what kind of margins to expect on selling products in the retail trade.
If I buy x at €50 (net) and Sell for €100 (Retail) I have a 50% margin.
From what I know in a similar market the margin is 30% meaning I would sell at €71.43. After you pay Vat on this it leaves very little
Any one any info on typical margins to expect in a business, Should vat be after you have got the margin factored in?
In my experience ( but I do not claim to be an expert ) the margin the trade talks about includes vat...it sounds better that way. However different industries may vary. Most wholesalers I know talk in terms of "mark-up" rather than margin eg if the mark-up is 33%....and you buy something for say ten euro ex vat ( wholesale prices are usually ex vat...you would aim to sell it for 13.30 ( if the mark-up is 33%) plus vat , total 16.20 ( assuming the item is subject to the top rate of vat ).
Small items tend to have bigger mark ups than large items. eg higher mark up on a bulb for a car rather than on a car itself.
In general many things fashion driven eg clothes tend to have higher margins / mark ups than things which may not be obsolete at the end of the season. However there are lots of variables in each trade...who one buys from...or import direct...what the competition is ....bulk discounts from supplier ....overheads incurred in sale of each item etc.
OK, if I read it correctly you're going from 50+VAT cost to €100 incl VAT retail, yes ?
If so then
Net Cost 50 VAT 10.75 Pay supplier 60.75
Net Sale 82.30 VAT 17.70 Customer pays you 100.00
You end up with 82.30-50= 32.30
Revenue get 17.70-10.75= 6.95
The 32.30 represents a mark up of 32.30/50 64.60% and a GP (margin) of 32.30/82.30 =39.25%.
ingore vat.
buy at €50
you want a 40% margin so divide €50 by 0.6.=€83.33
Then add the vat so multiply 83.33 x 121.5% is a retail price 'on the hook' of €101.25.Simple