Weighted Gross Margin
Weighted Gross Profit Calculator Explained:
(a) What is this? This calculator establishs your average GP including the impact of promotions over a period of time.
(b) What does this tell me? By considering how many units you have sold at certain GP%'s, the average margin for a product, category or business is deduced.
(c) Why should I use it? There are often three GP%'s inside a category. The first is the "shelf GP%", the second is the "Promotional GP%" and finally there is the "Weighted Average" of the first two elements combined. The category GP% average can be pulled down through over zealous use of promotions or by competitive pressures.
(d) Caution: This measure does not tell you precisely what your weighted GP% is as this will constantly change with the various promotions. Sometimes competitive pressures drag the GP% down and you need to be aware of what is happening and address this as required. You use this calculator at your risk.