How to Calculate Wholesale Profit Margins

Start with the landed cost

Landed cost per unit = (purchase price + delivery + loading/unloading + any other costs to get the goods ready to sell) ÷ number of sellable units.

Use sellable units, not total units. If 5% of a customer-returns lot cannot be sold, divide by 95% of the quantity.

Gross margin formula

Gross margin % = (selling price − landed cost) ÷ selling price × 100. Example: you sell at SAR 100 and your landed cost is SAR 70, so your gross margin is 30%.

Costs buyers often forget

Include these before you decide a deal is profitable:

• Storage time — slow-moving stock ties up space and cash
• Damaged or unsellable units
• Marketplace or payment fees when you resell