Percent Profit Margin
What is Percent Profit Margin?
You can use this feature when you want to offer discounts on certain products while maintaining a minimum profit margin.
Store owners cannot modify the product price to give discount to the customer due to possible Price Parity. This leaves him with the only option of giving discounts through shipping. But all products may not qualify for shipping discounts.
How it’s calculated
Let’s understand this with the help of an example.
For Product X – Price $52.16, Cost $32.71
Adding Profit Margin of 30% on cost: ($32.71 + $9.81) = $42.523
Value after deduction from price: $52.16 – $42.52 = $9.64
Actual Shipping charge: $10.97, New charge = [$10.97 – $9.64] = $1.33
Thus the shipping charge is reduced to $1.33 instead of $10.97.
This leaves both – the customer and store owner happy!
Note: Due to this, there would be cases where Shipping Cost may reduce to $0. By using the profit margin functionality, shipping amount can be $0, based on inputs of the products, cost and percent profit margin setting.