Gross Margin and Mark-Up Understanding Distributor Impact on Your Profit (20 Points) Due to the nature of your business, you have chosen to use distributors (firms who purchase large quantities from you and redistribute to customers, using their own sales force, warehouse, and trucking capabilities). The distributor actually purchases, owns, stores, and delivers your product for you to a retailer, earning a profit on that activity. The retailer then resells the product, earning a profit on that activity. The distribution chain that you participate in has the following profile: Manufacturer Cost Of Goods=0.25 Distributor Purchase Price=0.45 Retailer Purchase Price=0.60 Customer Purchase Price=1.00 If your cost of goods is $0.25, what is your gross margin, the distributors gross margin, and the retailers mark-up percentage? What would your gross margin rise to if you sold direct to the retailer, eliminating the profit of the distributor? 1. Identify unknowns 2. Show relationships 3. Connect with formulas 4. Solve the