Item Pricing, Cost and Markup Calculations
The Pricing tab on the item form is where you set your selling price and cost, and where AccuArk automatically calculates your markup and profit margins. Understanding how these fields interact is essential for accurate pricing across your catalog.
Base Price and Cost
Every item has two fundamental monetary values:
- Price — The selling price that customers see at the Point of Sale. This is the amount charged per base unit of measure.
- Cost — Your acquisition cost for the item. This is used to calculate margins and is updated automatically when you receive stock on a purchase order (via WAC) or manually through cost adjustments.
Markup Calculations
AccuArk calculates markup in two formats:
Percentage Markup
Percentage markup expresses how much you mark up the item relative to its cost:
% Markup = ((Price - Cost) / Cost) x 100
Example: If an item costs $10.00 and you sell it for $15.00:
% Markup = (($15.00 - $10.00) / $10.00) x 100 = 50%
Dollar Markup
Dollar markup is the absolute difference between price and cost:
$ Markup = Price - Cost
Example: If an item costs $10.00 and you sell it for $15.00:
$ Markup = $15.00 - $10.00 = $5.00
Profit Calculations
AccuArk also calculates profit margin in two formats:
Percentage Profit
Percentage profit (also called profit margin) expresses your profit relative to the selling price:
% Profit = ((Price - Cost) / Price) x 100
Example: If an item costs $10.00 and you sell it for $15.00:
% Profit = (($15.00 - $10.00) / $15.00) x 100 = 33.33%
Dollar Profit
Dollar profit is the same absolute value as dollar markup:
$ Profit = Price - Cost
Example: $15.00 - $10.00 = $5.00
Note that % Markup and % Profit are different calculations even though $ Markup and $ Profit are the same value. Markup is relative to cost; profit is relative to price.
Bidirectional Auto-Calculation
The pricing fields are linked together with bidirectional auto-calculation. When you change any one value, the others recalculate automatically:
| When You Change | What Recalculates |
|---|---|
| Cost | Markup % and $ recalculate, Profit % and $ recalculate (Price stays the same) |
| Price | Markup % and $ recalculate, Profit % and $ recalculate (Cost stays the same) |
| Markup % | Price recalculates based on Cost and the new markup %, Profit recalculates |
| Markup $ | Price recalculates (Price = Cost + Markup $), Markup % and Profit recalculate |
| Profit % | Price recalculates based on Cost and the new profit %, Markup recalculates |
| Profit $ | Price recalculates (Price = Cost + Profit $), Markup % and Profit % recalculate |
This means you can work from whichever direction is most natural. If you know you want a 40% markup, enter it in the markup field and the price will calculate. If you know the target price, enter it and the margins will calculate.
POS Permission Checkboxes
Three checkboxes on the Pricing tab control how POS operators can interact with the item's pricing:
| Checkbox | Purpose |
|---|---|
| Allow Price Change | When checked, POS operators can modify the selling price of this item during a transaction. When unchecked, the price is locked to the base price. |
| Allow Discount | When checked, this item is eligible for discounts (manual discounts, promotional pricing, and customer-type discounts). When unchecked, no discounts can be applied. |
| Allow Commission | When checked, sales of this item earn commission for the salesperson. When unchecked, the item is excluded from commission calculations. |
Weighted Average Cost (WAC)
AccuArk uses Weighted Average Cost to keep your item cost accurate as you receive stock at varying prices over time. WAC is automatically recalculated whenever you receive stock on a purchase order.
The WAC formula is:
New WAC = ((Existing Qty x Existing Cost) + (Received Qty x New Cost)) / (Existing Qty + Received Qty)
Example: You have 100 units at a cost of $10.00 each. You receive 50 more units at $12.00 each:
New WAC = ((100 x $10.00) + (50 x $12.00)) / (100 + 50)
New WAC = ($1,000 + $600) / 150
New WAC = $10.67
The item's cost field is automatically updated to the new WAC after receiving.
Update Item Current Cost Override
On the purchase order form, there is an Update Item Current Cost checkbox. When this is checked, the system bypasses the WAC calculation and directly sets the item's cost to the unit cost on the purchase order line. This is useful when:
- You want to force a cost update without blending with existing stock cost
- You are correcting a known incorrect cost
- The vendor has permanently changed their pricing and you want the new cost reflected immediately
When this checkbox is unchecked (the default), WAC calculation is used.
Tips
- Understand markup vs. profit — A 50% markup does not mean 50% profit. Markup is calculated on cost; profit is calculated on price. A 50% markup results in a 33.33% profit margin.
- Let WAC do its job — In most cases, you should let the automatic WAC calculation update your cost during receiving. Only use the manual cost override when you have a specific reason.
- Review margins after major purchases — After receiving a large order at a different cost than usual, check the item's pricing tab to verify the new WAC produces acceptable margins.
- Lock prices for consistency — Uncheck Allow Price Change for items that should always sell at a fixed price (e.g., gift cards, memberships, regulated items).