How to Calculate Profit Margin for Your Retail Shop

Know your margins to price right and grow profit.

Step 1: Track Cost Price

Record what you pay for each item (including transport, if significant).

Step 2: Set Selling Price

Selling price = Cost + your desired profit. Consider:

• Competitor prices
• Your margin target (e.g., 20–30% for FMCG)
• Volume vs margin trade-off

Step 3: Calculate Margin

Margin % = (Selling Price − Cost) ÷ Selling Price × 100

Step 4: Review Regularly

Some items have thin margins but high volume. Others have high margins but sell slowly. Balance both.

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