The distributor margin and the retailer margin turn your FOB into a sell-in and a shelf price. Here's where they live, how per-SKU overrides work, and why the math divides instead of multiplies.
Every number the calculator produces downstream of your costs — the distributor sell-in, the gross profit per case, the shelf price — flows through exactly two percentages: the distributor margin and the retailer margin. This tutorial covers both places you can set them, and the one piece of math you need to trust the output.
Set Dist. Margin and Retail Margin once in the toolbar at the top of the calculator and every SKU uses them. Type into a row's Margin % cell to override just that SKU. The math is margin-on-price: sell-in = landed cost ÷ (1 − margin), so $28.00 at 32.5% is $41.48 — not $28.00 × 1.325.
In the toolbar above the pricing table — alongside the brand name and market fields — sits a pair of percentage inputs: Dist. Margin and Retail Margin. They accept anything from 0 to 99 in 0.1% steps, and every keystroke recalculates the entire table. There is no apply button and no save step for the math itself.
These are your defaults: the distributor margin is the cut your distributor takes selling to retailers, and the retail margin is what the retailer takes on top of their cost. Hover the ? next to either label for the built-in benchmark — the tooltips cite 25–35% as typical for distributors and 30–45% for retailers, depending on format and channel. The category template you picked seeds the starting values (Beer starts at 28% / 30%, Wine at 30% / 40%, for example); see Category Templates for each template's assumptions, and Distributor Margins for where the real-world numbers come from.
Inside the table, each SKU row has its own two Margin % cells — one in the Distributor → Retailer column group, just before Sell-In and GP, and one in the Retail Shelf group. Each cell always displays the margin actually in effect for that row: the global value until you touch it, your own number after.
Type into one and that SKU is pinned. The override is sticky in one direction: change the global afterwards and every row still following it updates, while the overridden row keeps its own number. To put an overridden row back in step, type the current global value into its cell — it will match again, though it stays pinned to that number rather than tracking future global edits.
Overrides earn their keep whenever one product carries different terms than the rest of the portfolio: a keg SKU your distributor margins differently than packaged product, a premium line the retailer takes a thinner percentage on, or a promo SKU running on squeezed economics for a quarter. Set the globals to the portfolio norm, then override the exceptions.
Alculator computes gross margin on selling price — the beverage-industry convention — at both tiers. The formula the Sell-In column runs is:
Sell-In = Landed Cost ÷ (1 − Margin%). A case with a $28.00 landed cost at a 32.5% distributor margin sells in at $28.00 ÷ 0.675 = $41.48. Markup thinking — $28.00 × 1.325 = $37.10 — lands more than four dollars a case short, and the gap compounds again at retail.
The retail tier is the same operation one step later: the shelf price per pack is the sell-in divided across the packs in the case, then divided by (1 − retail margin). Division is what makes the margin a true share of the selling price; multiplication would make it a share of cost, which is markup — a different, always-smaller-looking number. If your distributor talks markup and your spreadsheet talks margin, Markup to Margin is the translation table.
The engine treats an exact zero as a deliberate choice, not an empty field. Set either margin to 0 and that tier passes product through at cost: the divide-by-one leaves the price unchanged and the tier's gross profit reads $0.00. That is precisely what you want when a tier doesn't exist in your channel — a self-distributed brand can zero the distributor margin, and a taproom or DTC model where you are the retailer can zero the retail margin, while the rest of the model keeps working.
One behavior to know: clearing a row's Margin % cell sets that SKU to 0% — it is an override of zero, not a reset back to the global. If you meant "follow the global again," type the global's value instead of deleting.
Both per-SKU margin columns are labeled Margin % with a lighter of price beside it. That suffix is the whole contract of the previous two sections in three words: the percentage is the tier's share of its selling price, not a markup on its cost.
One nuance the label hides: the distributor margin applies to landed cost, not raw FOB. Landed cost is (FOB − depletion) + freight + excise — what the distributor actually paid to get a case into the warehouse — so freight and tax get margined too, and a depletion allowance shrinks the base before the division. When your FOB and your freight are both zero-adjacent the two are the same number; the moment they aren't, the difference shows up in the Sell-In column. The full cost stack is covered in FOB to Landed Cost.
Margins set, the rest of the model is layout and direction:
Open the calculator, set your margins, and watch the whole three-tier story recalculate as you type.
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