Selling price, recommended retail price and margins
All plans
How Recipok calculates the recommended retail price, how to enter your current retail and wholesale prices, and how to read each recipe’s profitability.
What it is for
Pricing “by eye” or by copying the competition is the quickest way to work hard and earn little. Recipok starts from the real cost of each recipe and suggests a selling price with the profit you want to make, and then shows you, recipe by recipe, whether the price you actually sell at meets that target.
This article explains the editor’s Selling prices tab: the recommended retail price, the retail price you charge, the wholesale price and the rates by format. It is used by whoever sets the prices for the shop or for trade customers.
Before you start
- The recommended price comes from the cost: first get your recipe costing and your fixed and staff costs right.
- Set your target margin in General settings › Fixed and operating costs: it will be the profit percentage Recipok suggests for each recipe.
- If you sell a product in several presentations, first create its sales formats: each one will have its own price.
- If you sell to other businesses at different prices, create your price lists.
Selling price settings
Open the recipe and click Selling prices in the side menu. At the top you see two cards: Unit cost and Recommended retail price. Below them, the settings:
| Field | What it is |
|---|---|
| Profit percentage over cost | What you want to make on top of the cost. The first time, your target margin appears (“Proposed from your target margin. Save the recipe to keep it.”). If the recipe already had a different one, you can click Apply to this recipe. |
| VAT | The rate you apply to this product. |
| Desired contribution margin | The same target seen as a share of the price excluding VAT. It is converted automatically from the profit percentage, and vice versa. |
The formula is simple: Recommended retail price = cost × (1 + profit) × (1 + VAT).
| Format | 2Current retail price | Wholesale price | Cafés |
|---|---|---|---|
| Default format | €34.00 | €25.00 | €27.50 |
| 16 cm | €22.00 | €16.00 | €17.60 |
- 1€19.20 × 1.60 × 1.10 = €33.79. It is a reference, not a fixed price.
- 2The Current retail price is the VAT-inclusive price you actually charge. The other columns are net.
- 3The real margin compared with your target.
Rates by format
The table has one row per format (the default format, the production formats and the sales formats) and these columns:
- Current retail price: the price to the public, including VAT.
- Wholesale price: the net price to other businesses.
- One column for each of your company’s price lists. Price lists calculated from the retail or wholesale price fill in automatically when you change those prices; free-price ones you type in by hand here.
Click Save changes. If the current margin falls below the desired one, you will see the warning “The current margin is below the desired one”.
See the profitability of your whole catalogue
In Recipes and formulas, the Margin column colours each recipe according to its margin against your target:
| Level | Meaning |
|---|---|
| Excellent | 120% of the target or more. |
| High | Between 90% and 120% of the target. |
| Medium | Between 50% and 90%. |
| Low | Less than 50%: review the price or the cost. |
For a full analysis, with filters and export, use Recipes › Recipe costing (administrator). See Recipe reports.
Which price applies in a sale
When you create an order or a dispatch for a customer, Recipok chooses the price like this: the one entered for their price list in the recipe or format; if there isn’t one, the retail or wholesale price with their price list’s percentage; if the customer has no price list, the wholesale price or, failing that, the retail price. You can always correct it by hand on the line.
Recipok calculates your prices, but it doesn’t issue invoices. If you already use invoicing, accounting or POS software, we can connect it to Recipok so that prices aren’t entered twice.
Common mistakes
- Entering the price of a box of 6 as if it were the price of one piece: create a “Box of 6” sales format.
- Confusing profit over cost with margin on price: look at both figures, Recipok shows them side by side.
- Want to see the full reasoning with an example? Read How much to charge for a cake.