Margin Stacking
The cumulative percentage margins layered across every level of the distribution chain, from brand to consumer.
Full definition
Margin stacking is how the total difference between a brand's factory cost and the consumer's MRP is divided across each intermediary, brand margin, C&F margin, distributor margin, wholesaler margin, and retailer margin. Each layer adds its own percentage on top of the previous layer, so the gap between cost and MRP compounds as you move down the chain.
In Indian FMCG, typical stacks look like: distributor 4-8%, wholesaler 2-4%, retailer 8-15%. Dairy margins are thinner at every level because of the perishability and daily rotation. High-value categories like personal care or specialty foods carry fatter stacks.
Getting margin stacking wrong is fatal, too thin and distributors drop the brand, too fat and the MRP becomes uncompetitive at shelf. Good order management software simulates the stack before pricing changes go live so the CFO can see the downstream impact instantly.
Real-world example
A biscuit pack with factory cost Rs 6, C&F margin 2%, distributor margin 6%, retailer margin 10%, reaches an MRP of around Rs 8 after GST.
Where it applies
Applicable industries
This term is relevant across the following SpireStock-supported industries.
How SpireStock handles it
Related SpireStock features
The concepts described above are implemented end-to-end in these product modules.
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Related terms
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