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Private Label Margin Calculator

Work out private label margin instantly with clear inputs, formula shown and shareable results.

About Private Label Margin Calculator

Private label typically retails below the branded equivalent but carries a much higher percentage margin. The cash margin per unit is the decisive comparison, because a higher percentage on a lower price can still yield less cash profit per sale.

Formulas

Gross margin

Margin % = (Retail price - Cost) / Retail price x 100

Cash margin difference

Difference = (PL price - PL cost) - (Branded price - Branded cost)

Worked example

With the default values below, Private Label Margin Calculator returns Private label gross margin of 47.22%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Private label retail price
180
Private label cost
95
Branded equivalent retail price
240
Branded cost
168

Results

Private label gross margin
47.22%
Branded gross margin
30.00%
Margin advantage in points
17.22%
Cash margin difference per unit
$13.00

Step by step

  1. 1Values used
  2. 2Gross margin
  3. 3Cash margin difference
  4. 4Private label gross margin= 47.22
  5. 5Branded gross margin= 30.00
  6. 6Margin advantage in points= 17.22
  7. 7Cash margin difference per unit= 13.00

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation or compounding frequency into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

Why is private label margin so much higher?

Because there is no brand marketing cost in the supply price and the retailer captures the value that the brand owner would otherwise take.

Does switching customers to private label always help?

Only if the cash margin is higher and the customer does not leave for a competitor stocking the brand. Category-by-category testing is essential.

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