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Distributor Markup
Definition
The percentage or dollar amount a distributor adds to the manufacturer’s price to cover their operating costs and profit before reselling the product to retailers. Distributor markup impacts retail price and varies by category, margin structure, and distributor agreements.
How It's Calculated
(Distributor selling price − Manufacturer price) ÷ Manufacturer price.
Example
A distributor buys energy drinks from a manufacturer for $12 per case and resells them to retailers for $15 per case—representing a 25% distributor markup.
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