15% above tax, freight, etc. Sounds low, but we are not retailers. Take total cost and multiply by 1.15.
just realize that you are not making 15% profit (gross profit, net profit, pre profit, post profit, any type of profit) with this math.
take a piece that is $10 total cost (taxes, licenses, registration, etc)
$10 x 1.15 = $11.50
or $1.50 gross profit on that material.
but, $1.50 / $11.50 = 13% profit on the sale price.
so at the end of the year, you add up all your material sales, thinking that you made 15%, and lo and behold, you only made 13%...and this is in a perfect world.
If you want to have 15% to you bottom line on material at the end of the year, take your total material cost and divide by (1.00-0.15)
so in this case, $10 / 0.85 = $11.76 sell price, will get you the extra 2% on the bottom line at the end of the year.
it's the difference between markup and margin.
