How is the zakat on merchandise calculated: is it based on the purchase price or the retail selling price?

Zakat on trade goods is calculated by evaluating the merchandise at its market price (usually the selling price in the store) when a full year has passed, whether this price is higher or lower than the purchase price. Then, zakat is paid, which is a quarter of a tenth (2.5%). If the merchant sells wholesale, it is based on the wholesale price; if he sells retail, it is based on the retail price. However, if he sells both wholesale and retail, he should estimate the volume he sells in each category, and being cautious is preferable in this case.