Averaging product margin percentages can misstate the performance of a seller’s actual mix. The Catalog Profit Calculator adds the revenue and contribution from each entered SKU before calculating the combined margin. Quantities therefore matter as much as the percentage on an individual item.
Enter unit economics and sold quantities together
For product A, use ten units, price PKR 1,000, product cost PKR 600 and other unit costs PKR 100. With no fee, revenue is PKR 10,000 and contribution is PKR 3,000.
For product B, enter five units, price PKR 1,500, product cost PKR 900 and other unit costs PKR 150. Again with no fee, revenue is PKR 7,500 and contribution is PKR 2,250.
Add money before dividing for the combined margin
Across 15 units, revenue totals PKR 17,500 and contribution totals PKR 5,250. With shared fixed costs zero, combined margin is 30%. Both rows happen to earn the same percentage in this first example.
Now apply a 10% selling fee to A only. Its contribution falls to PKR 2,000, while B remains PKR 2,250. Combined contribution becomes PKR 4,250 and margin is about 24.29%.
Why a simple average gives a different answer
A now has a 20% contribution margin and B has 30%. Their unweighted average is 25%, but A produced more revenue than B. Dividing the combined PKR 4,250 by combined PKR 17,500 gives the correct revenue weighted result for these entered rows.
Do not average the percentages first and multiply that average by sales. Calculate the money totals from quantities and unit economics, then use the combined denominator.
Allocate shared fixed costs only once
The shared fixed cost input belongs to the complete entered mix. If rent or wages are already included in each row’s other unit cost, subtracting them again as shared fixed costs duplicates the allocation.
Discounts are entered per unit in their relevant row. Verify that quantities describe the same period and that returns or cancellations have been treated consistently with revenue and costs.
Inventory Turnover & Days Calculator uses cost of goods sold for a different stock movement question. Sales & Profit Scenario Planner instead models future orders from entered traffic and conversion assumptions. This catalog result is arithmetic for the supplied sales mix; it does not audit your accounts or automatically import product data from a marketplace.