How do I calculate a 125% margin?

[TheMythicalChicken]

I make things to sell to shops. I have a lady who wants to buy my products but she wants a different margin to the one I am offering. It is currently a 100%, margin so if a shop buys something from me for $10, they will sell it for $20, for instance.

But she wants 125%. I really need the money, so I can't say no. However, I have no idea how to calculate it. The Retail Price cannot change, so it will be the price she pays me that will change.

Can anybody help please? I need to send her a new invoice but I've spent hours trying to work out the new prices and I am completely stumped.

Thank you.

divide the retail price by 2.25.

The new ratios are that for every $9 the customer pays, she keeps $5 and you get $4.

So divide the retail price by 9 and multiply by 4. That’s your share.

Think of the RRP as 200%. So divide by 200 to get on unit.

Then times that by 75 to get your price

Or times 125 to get hers.

Disclaimer... I'm not great at maths. Halve the normal retail price, then times it by 0.75? The result will be your cut, the rest will be hers?

What @Ifailed said

Thanks Ifailed. So for instance I have a product that retails for $75. Is this correct...

Wholesale Price: $33
Retail Price: $75
Profit for store: $42?

If £10 is the 100% price, for sale at £20 and £20 must stay the same, you have to work out what £20 is 125% of, ie work backwards. She wants to pay you £8, so that she makes £12 and not £10.

100% of a tenner is ten, 25% of a tenner is two, add them and see how much she makes. Whatever is left is how much you make.

Try dividing the retail price by 2.25 (for the 100% or 1.0 of your selling price plus the 125% or 1.25 of the sales price she wants). For your example $20/2.25=$8.88 recurring.

So she would pay $8.88 and if I understand you right, then sells it on for that cost plus 125% (8.88x1.25=$11.10; $11.10+$8.88=$19.98). So you could round up your charge probably to $8.90. Does that work?

Took so long to spell that out, multiple cross posts!

OP, for a retail price of $75, and a store margin of 125%, it would be:
wholesale price = $33.33, profit = $41.67.

I was always taught that margin was calculated as cost/1-the margin. So if you want 25% margin on a £35 item, it wold be 35/0.75=46.66. And to work out what the margin % is, 1 minus the cost by the sell, so 1-(35/46.6)=0.25%, so 25%. If you only know your sell and your margin, you divide sell by 1 minus the margin eg 46.66/0.75, which gives you the cost.

The customer sells at your selling price (1.0) plus the fraction of profit (1.25) she wants.
So she sells at 2.25 x your price

So if she wants to sell at £20, then you invoice her selling price, divided by 2.25
That is £20 / 2.25 = £8.88888
so round this off to £8.89

Your other customers, who want 100% profit,
sell at 2.0 x your price.
So you invoice them their selling price, divided by 2.0
which is £20 / 2.0 = £10