Sample CPG margin model
How an illustrative CPG model builds the channel margin stack, from a bill of materials to net margin across distributor, retailer and DTC, plus the cash tied up in minimum orders.
This example is for FMCG and CPG founders modelling margins, production cash and channel pricing.
For illustration only: any business or figures shown here are made up, and your own results will differ.
Margin stack
- Bill of materials to unit cost (e.g. $2.00 a unit)
- Distributor and retailer margins (e.g. the retailer keeps 40% of an $8 shelf price, leaving $4.80; the distributor keeps 25% of that, leaving $3.60)
- Direct-to-consumer vs wholesale (e.g. $8 vs $3.60 a unit to you, before DTC shipping and fees)
- Trade and volume discounts to net
Production cash
- Minimum order quantities and the cash they tie up
- Shelf life and waste
- Co-packer vs in-house production
- Net margin if ingredient costs rise or production runs get smaller
Outputs
- Channel margin stack model
- Production and cash plan
- Blended margin across DTC and wholesale
Questions founders ask
What is a CPG financial model?
A projection that builds a bill of materials into unit cost, stacks distributor and retailer margins to a net figure, and models the cash tied up in minimum orders and trade spend.
Can it compare DTC vs wholesale?
Yes. Both channels are modelled together, so you see blended margin and working capital.
What output does it produce?
A margin and cash model with the channel margin stack and production plan.
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