Overview
The offer calculation determines the sales price of a product based on the purchase price plus all associated costs, markups, and taxes. It follows a standardized step-by-step scheme used in trade and retail.
Calculation Scheme
Purchase Side
| Operation | Item | Note |
|---|
| List purchase price | Supplier's catalog price |
| − | Supplier discount | % reduction on list price |
| = | Net purchase price | |
| − | Supplier cash discount | % reduction for early payment |
| = | Cash purchase price | |
| + | Procurement costs | Shipping, customs |
| = | Cost price | True cost of the goods |
Sales Side
| Operation | Item | Note |
|---|
| Cost price | Carried over from above |
| + | Overhead surcharge | Operating costs, rent, staff, etc. |
| = | Break-even price | |
| + | Profit markup | Desired profit margin |
| = | Cash selling price | |
| + | Customer cash discount | Added back: allows customer early-payment discount |
| = | Net selling price | |
| + | Customer discount | Added back: allows customer to receive a discount |
| = | List selling price net | |
| + | VAT | e.g. 19% in Germany |
| = | List selling price gross | Final price for the customer |
Notes
- Skonto and Rabatt are added back on the sales side because they represent potential deductions the customer may claim, the sales price must cover them
- Overhead surcharge is typically expressed as a percentage of the cost price, based on the company's actual operating costs
- The calculation can be performed forward (from purchase price to selling price) or backward (from a target selling price to derive required purchase price)