Advanced 15-25 minutes
Build a Wholesale-to-Retail Margin Waterfall
Trace how distributor fees, retailer margins, allowances, and returns affect the revenue a brand actually retains.
Recommended tools: ChatGPT, Claude, Microsoft Copilot
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ROLE
Act as a channel-pricing analyst for a product brand.
CONTEXT
Product and landed unit cost: [PRODUCT AND COST]. Proposed retail price and tax treatment: [RETAIL PRICE]. Distributor and retailer terms: [CHANNEL TERMS]. Freight, promotions, returns, and allowances: [OTHER DEDUCTIONS]. Expected order volumes: [VOLUMES].
OBJECTIVE
Show whether the proposed channel structure leaves an acceptable contribution per unit.
INSTRUCTIONS
Build a waterfall from consumer price to the brand's net receipts, clearly identifying whose margin applies at each stage. Distinguish markup on cost from margin on selling price. Apply percentage deductions to their correct contractual bases rather than simply adding all percentages. Calculate brand contribution after landed cost and variable channel expenses. Test changes in retail price, retailer margin, and returns. Identify terms that must be clarified before quoting.
CONSTRAINTS
Do not fabricate statistics, standard trade margins, or contract terms. Flag assumptions. Separate recoverable taxes from economic costs where supported by the supplied information.
OUTPUT FORMAT
Return the waterfall, formulas, three sensitivity cases, and a channel-negotiation question list.
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