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Professional Salesman
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9,758 Posts
Discussion Starter · #1 ·
I need help to get exact numbers for a sales contract for the boss.

My price is $113.21, competitor's is 26% - 31% less than mine. What is the competitor's price?

If you want to solve them all, I need 26% less and 31% less for -

$113.21
$169.84
and
$215.10

Thanks for the help.
 

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Professional Salesman
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9,758 Posts
Discussion Starter · #3 ·
$83.78 - $78.11
125.68 - 117.19
159.17 - 148.42
That's exactly what I had, but my boss says not, because he used this method.

"If brand is 26 -31% higher than the generic, to check the math you should be able to multiply the generic price times 1.26 or 1.31 and get the brand price. Although my numbers are approximate, try this math on your numbers - then mine."

 

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are you figuring generic price from brand as a percent decrease?

or brand price from generic as a percent increase?

a 26% or 31% decrease in price can not be back-calculated simply by multiplying by 1.26 or 1.31

you would have to multiply by 1.35128 (for 26%) or 1.44937 (for 31%)
 

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Professional Salesman
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9,758 Posts
Discussion Starter · #6 ·
are you figuring generic price from brand as a percent decrease?

or brand price from generic as a percent increase?

a 26% or 31% decrease in price can not be back-calculated simply by multiplying by 1.26 or 1.31

you would have to multiply by 1.35128 (for 26%) or 1.44937 (for 31%)
Brand to generic.

I need to know the price of the generic if it is 26% less than the brand.

Brand is $133.21.

I know Generic price (G) x 1.26 = $133.21

G = 133.21/1.26 = 105.72

Wow, you just awaken my algebra skills. Thanks S/C. Green to you.
 

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I'm a Math Teacher, what they are saying is true.

(1.0 - x%) * Original Value = Discounted Price
(1.0 -.26) * 113.21 = 83.78

(1.0 + x%) * Discounted Value = Markup Price
(1.0 + x) * 83.78 = 113.21
83.78 + 83.78x = 113.21
-83.78 + 83.78 + 83.78x = 113.21-83.78
83.78x = 29.43
83.78x/83.78=29.43/83.78
x=35%

So while in this calculation 83.78 is 26% cheaper then your price, YOUR price is 35% higher then THEIR price.

The difference is you are using 26% of YOUR price the first time, and 35% of THEIR price the second.
 

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Professional Salesman
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9,758 Posts
Discussion Starter · #10 ·
I'm a Math Teacher, what they are saying is true.

(1.0 - x%) * Original Value = Discounted Price
(1.0 -.26) * 113.21 = 83.78

(1.0 + x%) * Discounted Value = Markup Price
(1.0 + x) * 83.78 = 113.21
83.78 + 83.78x = 113.21
-83.78 + 83.78 + 83.78x = 113.21-83.78
83.78x = 29.43
83.78x/83.78=29.43/83.78
x=35%

So while in this calculation 83.78 is 26% cheaper then your price, YOUR price is 35% higher then THEIR price.

The difference is you are using 26% of YOUR price the first time, and 35% of THEIR price the second.
Thanks. I will file these examples away.
 

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Let's Go Fishin Boss!
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Sounds like your boss is a prime example of the Peter Principal. :biggrin:

You learn that math very quickly playing the stock market!
Your $100/share stock that takes a 20% hit is now worth $80/share but to get back to break even it's gotta rise by 25%.

Don't ask me how I know! :rotfl:

Glad that the 2Cool folks here were able to help you out on this one.
 

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Your boss is using the Gross Profit Markup method to come up with 1.35. In other words if you desire a 26% Gross Profit you use following 1/1-.26. Then you multiply your cost with that markup.
You are discounting the wholesale price by 26%. In other words you're comparing apples and oranges. Typically, a business owner/manager likes the Gross Profit method to figure out what price he needs to use to ultimately make a profit, as expenses are usually some % of GP.
However, in order to be competitive, you still have to understand how to discount your wholesale price to figure out why you are getting the shaft from your wholesaler, while your competitor is getting such a good deal...usually because they have bought in larger volume.
 
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