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formula to decrease a margin, in connection with increasing basic value

  1. #1
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    formula to decrease a margin, in connection with increasing basic value

    Hello!

    I'm trying to build a formula to form a price-list. I have some basic prices from a supplier and want to build my prices with a simple rule: the higher the basic price is (column A), the lower my profit margin (in %) should be (column B).
    Example:
    Basic value is $50, my price is $75 (50% margin)
    Basic value is $100, my price is $130 (30% margin)
    Basic value is $150, my price is $172,5 (15% margin)
    And so on...

    I forgot most of what I've learned on Excel at my university (long time ago...), so I tried to do it by using simple thresholds, with "if" function:

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    Unfortunately, this method has some serious cons, e.g.:
    1. It doesn't look good.
    2. If the basic price of 1 product is $49,9 and for the second one - $51,1 - in result you got absolutely different end values for them. I tried to put more "if" operators, but Excel didn't let me do it.

    I assume that the problem is quite simple and I should find it on the web, but I didn't, probably because my poor technical English.

    Please, help.

    W.
    Last edited by wanias; 10-08-2008 at 12:03 PM.

  2. #2
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    Use a vlookup, see attached.

    In your example you actually make less money selling the $150 item than the $100 - you may want to think about that... I've also included a direct mathematical relationship based on a "transaction cost + markup" type model which is commercially a bit more pragmatic. You can see it achieves similar results to yours for some numbers but is much more reliable from every value from £1 to £1m...

    HTH
    Attached Files Attached Files

  3. #3
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    Maybe you need 3 cells.
    Cell A is your cost
    Cell B is your price
    Cell C is formatted for % and contains the formula:
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    You can copy this down as many rows as needed.

    Cell C will tell you what your margin is.
    Last edited by additude; 10-08-2008 at 07:12 AM. Reason: Additional Info

  4. #4
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    If your value is in A1 try also =LOOKUP(A1;{0;50;100};A1*{1.5;1.25;1.15})
    You might need to replace the ; with , depending on your xl version
    Cheers

  5. #5
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    Thumbs up

    Thank you all!

    In the meantime I googled out the vlookup function, but I still couldn't understand how to use it to suit my needs. Your replies made everything clear - mostly the file from Cheeky Charlie, but I want to thank you all guys for your replies.

    In case anyone has this kind of problem in future, hereby I present the solution that works for me (see: attachment).
    Attached Files Attached Files

  6. #6
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    I didn't have time to re-write your nested IF statements, but I think your issue with the IF statements is you need to use AND() to isolate your number slices.

    For example,
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