Pricing definitions
General terms
Purchase price
The purchase price is the price you pay for a service when you buy it from the supplier. The purchase price is invoiced by the supplier.
Markup
The markup refers to a percentage that is added to the purchase price of an item to arrive at a sales price. For example, if you have a markup of 33% on your purchase price, it means that you sold your product 33% above your purchase price. If you want to determine your markup, you can ask yourself the following question: What markup must be added to the purchase price to make a profit?
Margin
Margin refers to the percentage of the selling price that is considered profit. If they have a margin of 33%, it means they made 33% profit on the sale. So margin is the percentage of profit from the selling price. If you want to determine your margin, you can start from the question, how much profit do you want to have in the end?
Selling price
The selling price is the price you invoice to your customer. It consists of the purchase price and the added markup.
Profit
Profit is the difference between the selling price and the purchase price.
Detailed terms
Commission
If you receive a commission, for example from a hotel, advatra can deduct this amount from the purchase price. So if you add a commission, your profit will be higher.
Effective PP (purchase price)
The effective purchase price is the price that your supplier invoiced you at the end.
PP (Purchase price)
The purchase price is the price you pay for a service when you buy it from the supplier. The purchase price is invoiced by the supplier.
Original SP (Selling price)
The original selling price is the price you invoice to your customer. It consists of the purchase price and the added markup.
Total SP (Selling price)
The total selling price consists of the original selling price plus the surcharge/discount.
Original profit
The original profit is the difference between the selling price and the purchase price.
Total profit
The total profit consists of the original profit plus the surcharge/discount.
Original markup
The original markup refers to a percentage that is added to the purchase price of an item to arrive at a selling price. For example, if you have a markup of 33% on your purchase price, it means that you sold your product 33% above your purchase price.
Original margin
The original margin refers to the percentage of the selling price that is considered profit. For example, if you have a margin of 33%, it means they made 33% profit on the sale. So, margin is the percentage of profit from the selling price.
Total margin
The total margin consists of the original margin plus the surcharge/discount.
Total markup
The total markup consists of the original markup plus the surcharge/discount.
Surcharge/discount
The surcharge/discount will be added (or subtracted) on top of the selling price.
Net
The total selling price exclusive value added taxes.