The Retailer who wanted Correct Profit Margins on his Frequently Changing Cost of Poultry
I am using Candela for bakery. The nature of my business is such that I can’t keep a fixed retail price for some of my products. For instance, the price of eggs is not constant, it changes every other day. As your support department suggested, I have selected User Price for eggs and can now enter whatever price I want to sell at on the sales and return screen. But there is a problem: since the profit margin is dependent on the cost, I don’t get the correct profit margins because the margins are calculated according to the cost price once entered on the Product Definition screen. What should I do? How do I change the cost every day to get realistic profit margins?
No confusion, no worries. You don’t have to enter the cost every day; the system will calculate realistic profit margins according to the changing cost price. This is how:
We believe you change retail price by a certain percentage of the cost. All you have to do is enter that percentage in the Average Cost price of the product on Product Definition screen (you don’t have to use the percentage sign). Then go to System Configuration>Sales tab and mark the checkbox ‘Cost price Calculation for user price products.’
Now whenever you increase the retail price of user price products, the system will increase the cost according to the given percentage. This means if you retail price increase you cost price will also increase by the given percentage thus generating correct profit margins.
Make Retail Simple and stay happy.