How to calculate Price to Retailer (PTR) and Price to Stockist (PTS) for an Ayurvedic Medicine Company’s Products?


If you own an ayurvedic marketing company or ayurvedic manufacturing company then fixing and calculating maximum retail price (mrp) for your products is a crucial step. Calculation about fixing MRP, we have calculated in our article: How to calculate Maximum Retail Price (MRP) including PTR/PTS of an Ayurvedic Medicine Company’s Products? In This article, we will calculate PTS, PTR, MRP calculation. 

Important Definitions related to MRP, PTR and PTS:

Definition of Maximum Retail Price:

Maximum retail price (MRP) is a maximum price of any product/service that can be paid by end consumer for purchasing or using it. It is included of all taxes.

Definition of Price to Retailer (PTR): 

It is the price at which at goods or services are billed to retail shop or store by wholesaler or stockist. 

Definition of Price to Stockist (PTS):

It is the price at which goods or services are billed to stockist/wholesale/distributor* by company or its CnF. 

Methods of Calculating PTR and PTS:

Here we will discuss about how you can calculate PTR and PTS from a given maximum retail price. 
In process of calculating maximum retail price, we also find PTS and PTR. But in this article we will calculate from given or already fixed MRP. We calculate PTS and PTR including GST and excluding GST. 
If you are calculating PTS and PTR including GST then you will not need to deduct GST from MRP. If you are calculating PTS and PTR excluding GST then deduct GST from MRP. 

You can calculate PTR and PTS with two methods.
1. By Based upon GST Factor
2. By Simple Calculation Method

Suppose we have a product having maximum retail price of 95/- 
Retailer Margin 20% 
Stockist Margin 10% 
GST 12% 

Based upon GST Factor:

First you need to deduct retailer margin from MRP. This will give a net value that in other words we can say PTR including GST like below: 

Formula used will be MRP*(1-Retailer Margin %) 
Net value = 95*(1-20%) = 76/- 

Price to Retailer (PTR) Calculation

Now calculate Price to retailer. Price to retailer (PTR) will be calculated by deducting GST value from above net. For that you need to first calculate GST factor value. Formula for GST factor calculation is finding below: 

GST Factor = (100+GST)/100 
GST Factor value = (100+12)/100 = 112/100 = 1.12 
PTR calculation formula = Net Value / GST Factor = 76/1.12 = 67.86/- 

Price to Stockist (PTS) Calculation:


Price to stockist will be calculated by deducting stockist margin percentage from retailer price. Formula for calculating price to stockist (PTS) is like: 
PTS calculation formula: PTR*(1 – Stockist Margin %) = 67.86*(1-10%) = 61.07/- 

Based upon Simple Calculation

Formula for calculating any price formula is Amount*100(100+margin). 
First we will calculate price to retailer then price to stockist. 

Price to Retailer:

For calculating price to retailer, ptr calculation formula will be MRP*100/ (100+retailer margin) 
PTR = 95*100/ (100+20) = 95*(100/120) = 95/1.2 
PTR = 76.16/- 
This PTR is included of GST. Now calculate PTR without GST by implementing similar formula. Replace margin with GST in formula. 
PTR (W/O GST) = 76.16*100/ (100+12) = 76.16/1.12= 68/- 

Price to Stockist:

For calculating price to stockist, pts calculation formula will be PTR*100/ (100+ Stockist Margin) 
PTS = 76.16*100/ (100+10) = 76.16/1.1 
PTS = 69.24/- 
This PTS is included of GST. Now calculate PTS without GST by implementing similar formula. 
PTS (W/O GST) = 69.24*100/ (100+12) = 69.24/1.12 = 61.82/- 

In similar way, you can calculate CnF price and other prices like super stockist, sub stockist, wholesale, distributor etc. 

PTS PTR Calculator in excel

Read Related:


Keywords: pts and ptr full form, how to calculate net rate in medicine, how to calculate price to stockist of pharma, maximum retail price calculation excel, distributor margin formula, how to calculate pts, how to calculate mrp in gst, ptr pts calculation, pts ptr mrp calculation, ptr rate full form, 



He is Pharma Entrepreneur having a Ayurvedic Start-up. He loves to share his experience and knowledge what he acquire during his professional life. He is full time blogger, part time entrepreneur and partial time helper for new star-up's

Comments

Post a comment

Send Your Query

Popular posts from this blog

How to Open Ayurvedic Medicine Store?

Image
Ayurvedic medicines (including herbal products) are getting popularities among people. People are very concern about side effects and harm full effects done by preparations containing chemicals and other synthetic products. Whether there are daily used products or beauty and skin care products, customers has started to ask for ayurvedic and herbal products.

Cosmetic industry has turned toward herbal preparations and more than 90% of products will claim as natural and herbal ingredients. Due to increase in demand of herbal and ayurvedic products, opening Ayurvedic Shop is one of the best business opportunity in recent time.

In this article, we are covering the requirements and licenses for opening Ayurvedic Medicine Store through questions and answers.

First discuss about step-wise procedure:
Search for shop (owned/rented) Choose a related name to your storeShop Registration at local authorities if any GST number if your turnover is above 20 lakh annually or selling products online. …
Read more

How to sell Ayurvedic Medicines Online?

As we have discussed in our previous articles, there is no requirement of drug license or any other license for selling of ayurvedic and herbal products. You will need license for manufacturing of ayurvedic products only. In this article, we will cover, how to sell ayurvedic products online.

First have a look at starting ayurvedic manufacturing and marketing business.
Check out: Licenses required for manufacturing Ayurvedic Products
Also check: How to start Ayurvedic Marketing Company?

Now come to online selling of ayurvedic and herbal products. All ayurvdic medicines and herbal products are non prescription products. These are mostly sold as over the counter products as a useful and helpful remedy in certain type of health complications. So you can sell ayurvedic medicines without any restriction online.

For selling ayurvedic medicines online, you will need to compile with term and conditions of the online portal/website through which you want to sell your products or have to set-u…
Read more

How to start Ayurvedic Marketing Company?

Ayurvedic and Herbal Sector have shown a rapid growth in recent years. This creates lot of opportunities for new entrepreneurs to start business in this field.  Here we are going to describe you how you can start ayurvedic marketing company and what type of documents and licenses you required to start ayurvedic marketing company.

First we will discuss about requirements for starting ayurvedic marketing company:
You should have some prior experience (Online or Offline) in marketing of herbal and ayurvedic products so you can establish your own ayurvedic marketing company.A quality Ayurvedic and Herbal products ManufacturerBusiness Plan and Marketing strategy to promote your productsFinancial resources i.e. bank loan, own saving, other’s investment etcPackaging material or/and promotional material supplier (Your manufacturer can also provide this service)
Licenses and Registrations Required:
Hence no drug related licence is required for selling and purchasing of ayurvedic medicines. Only…
Read more