Profit Margin
The percentage of the retail selling price that represents profit after subtracting all costs. Calculated as (Retail Price - Landed Cost) / Retail Price.
Definition
The percentage of the retail selling price that represents profit after subtracting all costs. Calculated as (Retail Price - Landed Cost) / Retail Price.
Related Terms
Landed Cost
The total cost of acquiring a vehicle including purchase price, auction fees, transport, inspection, title fees, and any reconditioning needed.
Max Bid
The maximum amount a buyer should bid on an auction vehicle to maintain their target profit margin after all landed costs are accounted for.
Spread
The difference between the wholesale (auction) price and the retail price of a vehicle. A larger spread means more potential profit.
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