## What is Shopping Basket Margin?

Shopping basket margin is a metric used to measure the overall effectiveness of a business’s pricing strategy. It is calculated by subtracting the sum of the individual item prices from the total amount paid by the customer for all items in the shopping basket. This margin is then divided by the total amount paid, giving a percentage that reflects the total margin of the shopping cart.

## Why is Shopping Basket Margin Important?

Shopping basket margin is an important metric for businesses as it can be used to measure the effectiveness of their pricing strategies. It gives businesses an indication of how much money they are making on each transaction and helps them to identify areas where they can improve pricing in order to increase profits.

## How to Calculate Shopping Basket Margin?

Calculating shopping basket margin is simple and only requires a few basic calculations. Here is how to do it:

- Step 1: Add up the individual prices of all items in the shopping basket.
- Step 2: Subtract the sum of the individual item prices from the total amount paid by the customer for all items in the shopping basket.
- Step 3: Divide the difference from step 2 by the total amount paid by the customer for all items in the shopping basket.
- Step 4: The resulting number is the shopping basket margin.

## Example of Shopping Basket Margin

Let’s say a customer purchases a shirt for $20, a pair of jeans for $30, and a hat for $10. The total amount paid by the customer is $60. The sum of the individual item prices is $60 so the shopping basket margin is 0%.

## Conclusion

Shopping basket margin is an important metric for businesses as it helps them to measure the effectiveness of their pricing strategies. It is calculated by subtracting the sum of the individual item prices from the total amount paid by the customer for all items in the shopping basket. Understanding this metric can help businesses to identify areas where they can improve pricing in order to increase profits.**References:**