Explanation of Markup, Value Add, Contribution and Margin

Explanation of Markup, Value Add, Contribution and Margin for Quotes

In the print industry, there are several styles of viewing the selling price:

1) Markup
2) Value Add
3) Contribution
4) Margin

You can ask your IQ Build Lead to set your system to display one of these.  The following is an explanation of how they work.

Markup 

Markup is calculated as follows:
Markup Calculation = Retail Price - Wholesale price. 
Markup Percentage = (Markup Calculation / Wholesale Price) *100 

IQ will also add the amount of the markup value should you add them manually.

Value Add

According to Graphic Arts Technical Foundation: Value Add is defined as follows: 
The value added to any job is determined by the amount of dollars contributed to the gross sale produced internally and excludes any outside purchase of materials or services.
Value add with this formula. 
Value Add ($) = Selling (Retail) Price – (Materials Cost + Total of Outsource Cost [if any])
Value Add (%) = (Value Add / Selling (Retail) Price) * 100




Contribution 

We calculate Contribution with this formula 
Contributions ($) = Retail Price – (Material Cost + Labour Cost + *Outsource Cost(if any) )
Contributions (%) = (Contributions ($) / Retail Price) * 100




Margin

Margin is calculated as follows:
Margin ($) = Retail Price - Wholesale Price 
Margin Percentage = Margin ($) / Retail Price 




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