Cost to Retail Ratio Calculator – Understand Your Pricing Margin

When running a retail business, knowing the relationship between the cost price and the retail price is crucial for setting margins and analyzing profitability. The Cost to Retail Ratio Calculator helps you quickly determine what percentage of the retail price is made up of cost.

What is Cost to Retail Ratio?

The Cost to Retail Ratio (CRR) shows the proportion of cost compared to the retail price, expressed as a percentage. Businesses use this ratio to evaluate profitability and ensure pricing strategies are sustainable.

Formula for Cost to Retail Ratio

The formula is:

$\text{Cost to Retail Ratio (\%)}=\left(\frac{\text{Cost Price}}{\text{Retail Price}}\right)\times 100$

Step-by-Step Calculation

1. Take the cost price of the product.
2. Take the retail (selling) price of the product.
3. Divide cost price by retail price.
4. Multiply the result by 100 to convert it into a percentage.

Example Calculation

Suppose a product costs $40 and is sold at a retail price of $80.

$\text{Cost to Retail Ratio (\%)}=\left(\frac{40}{80}\right)\times 100=50\%$​​​​​​​

So, the Cost to Retail Ratio = 50%.

Why Use a Cost to Retail Ratio Calculator?

• Helps in measuring profitability.
• Assists in pricing decisions.
• Useful for retail inventory valuation.
• Provides clarity for discounts and markups