How is the automatic margin calculated?

If your products have a purchase price and a regular price, but not a filled margin attribute, ChannelEngine will automatically calculate the expected margin between the two.

While this is a simplistic calculation (because it doesn't take any fees or additional costs into account you might have), it does offer a way to exclude products with very low projected margins from your product selection (as you can use filter rules based on the Margin attribute and its value).

How is this margin calculated?

It is important to realize that in order to properly determine the margin, we take VAT on the (retail) price into account as normally this will not add to your net income. The products themselves will almost certainly be bought from another company, so no tax is subtracted from the purchase price.

priceExVat = (Price / (100 + vatRate)) * 100; 
Margin = Math.Round(((priceExVat - PurchasePrice) / priceExVat) * 100, 2); 

Example (taking VAT in account)

• Price = 200
• Purchase Price = 50
• VAT = 20%

priceExVat = 200 / 120 * 100 = 166,67

Margin = (166,67 - 50 (= 116,67)) / 166,67 * 100 = 70%

Example (not taking VAT in account)

• Price = 200
• Purchase Price = 50

Margin = (200 - 50 (= 150)) / 200 * 100 = 75%