Every number on this page is computed by the same engine that runs the calculator and the app, and our test suite recomputes them on every build. If a figure here ever disagrees with the calculator, the build fails.
Margin is a share of the selling price
The beverage trade quotes margin on the selling price, not markup on cost. A distributor who “needs 30 points” divides by 0.70; they do not multiply by 1.30. The gap is not small: on a $28.00 case it is the difference between a $36.40 and a $40.00 sell-in.
Forward: from FOB to the shelf
Per case, in this order. Depletion allowance comes off the FOB first (it is money the supplier gives back to fund post-offs), then freight and excise are added to reach the distributor’s landed cost, then each tier applies its margin on its selling price. The retailer prices the pack, so the sell-in is divided by packs per case before the retail margin.
Reverse: from a target shelf price to the FOB you need
The same chain, inverted. Reverse mode is the honest way to answer “what do we have to FOB at?”: start from the price the category supports and solve backwards. If freight and excise exceed what the target leaves, the required FOB is floored at zero and flagged as infeasible rather than shown as a negative number.
Worked example
A 6×4 case of 12 oz cans (24 units), a 32.5% distributor margin and a 28% retail margin, no freight, excise or depletion. These are the same figures used on the home and features pages.
| Input | Landed | Dist. sell-in | Dist. GP / case | Shelf / 4-pack | Shelf / can |
|---|---|---|---|---|---|
| Forward, FOB $28.00 | $28.00 | $41.48 | $13.48 | $9.60 | $2.40 |
| Forward, FOB $30.00 | $30.00 | $44.44 | $14.44 | $10.29 | $2.57 |
| Reverse, target $12.99 / 4-pack | $37.88 | $56.12 | $18.24 | $12.99 | $3.25 |
Check it by hand: $28.00 ÷ 0.675 = $41.48; $41.48 ÷ 6 packs = $6.91; $6.91 ÷ 0.72 = $9.60. The reverse row runs the chain the other way: $12.99 × 0.72 × 6 = $56.12 sell-in; × 0.675 = $37.88 required FOB.
Rounding, kegs and the fields that trip people up
.99 / .49 rounding
The rounding toggle snaps a computed shelf price to the nearest .49 or .99 ending ($9.60 becomes $9.49, $10.29 becomes $10.49). It is a display convention applied after the maths; margins are always computed on the unrounded price so that the number you quote a distributor is exact.
Kegs and per-pour economics
Kegs are priced per keg through the same chain, and shown per pour as well: a half barrel is 15.5 gallons, 1,984 ounces, 124 sixteen-ounce pours at 100% yield. Per-pour figures are a view on the same engine output, not a separate calculation.
Freight, excise and depletion
Freight and excise are per-case add-ons to the distributor’s landed cost (FOB is at your dock, so freight compounds through both margins). Depletion allowance is netted off the FOB before anything else. Federal excise rates and their reduced tiers are documented, with sources, in Excise tax and beverage pricing.
Pack formats
Every standard format (6×4, 4×6, 2×12, 24×1, 12×1, 30×1, cases of 750 ml, kegs) carries its packs-per-case and units-per-pack; an unknown format falls back to 6×4 and is flagged rather than silently miscounted.
One engine, tested
The calculator, the brand editor, the analytics, every CSV, Excel and PDF export and every share page call the same function in one module. A guard in the test suite fails the build if any page re-implements the maths, and the engine itself is run through golden vectors (hand-derived cases like the table above), the reverse-is-the-inverse-of-forward property across thousands of input combinations, and no-NaN / no-negative floors, on every change and in continuous integration. The example numbers on this site are tagged so the same suite recomputes them from the engine.
Benchmarks and sources
The margin ranges in the benchmarks table and the Learn articles are planning ranges compiled from public trade sources and the assumptions in our category templates; they are reviewed and dated, and they are not a substitute for the margin your distributor actually asks for. Where an article states a rate or a legal date, the source is linked on the page.