Estimate gross transaction margin from what a dealer paid, what the dealer sold for and the direct costs associated with the transaction. The tool separates margin from markup so the economics are easier to interpret.
Margin and markup answer different questions. Margin asks how much of revenue becomes gross profit; markup asks how much profit is generated relative to cost.
A dealer's actual business profit also depends on salaries, premises, insurance, security, financing, inventory risk, marketing, payment processing and other overheads. Those are outside a transaction-level gross-margin model.
Gross profit divided by selling revenue.
No.
No.
Yes.