Pricing Calculator

Calculate product pricing, profit margins, markup percentages, costs, and the ideal selling price for maximum profitability.

Pricing Calculator

Calculate a selling price from your unit cost and a profit target. The calculator works in either direction: set a target margin or markup to get a price, or enter a price to see the profit it leaves.

Pricing formula

The two standard cost-based pricing methods give different prices from the same target percentage:

  • Price from target margin: price = cost / (1 - margin / 100)
  • Price from target markup: price = cost x (1 + markup / 100)

Margin measures profit against the selling price, while markup measures it against cost (margin = profit / revenue, markup = profit / cost). Pricing for a 40% margin therefore requires more than adding 40% to cost. When percentage-based selling fees apply, extend the margin formula so the fee is priced in: price = cost / (1 - margin / 100 - fee rate / 100).

Worked example

A product costs 24 per unit and the seller wants a 40% margin.

  • Price: 24 / (1 - 0.40) = 24 / 0.6 = 40
  • Profit: 40 - 24 = 16, and 16 / 40 = 40%, confirming the margin
  • The same price expressed as markup: 16 / 24 = 66.7%

Now add a selling fee of 12% of the price, used here purely as an example value. To keep the full 40% margin after the fee: price = 24 / (1 - 0.40 - 0.12) = 24 / 0.48 = 50. At 50, the fee is 6, leaving 50 - 6 - 24 = 20 of profit, and 20 / 50 = 40% as intended.

When to use this calculator

  • Listing a new product. Turn landed cost and a margin target into a concrete asking price instead of guessing and checking later.
  • Selling through a marketplace. Price fees in from the start so commission and payment processing come out of the price, not out of your margin.
  • Repricing after a cost change. When a supplier raises prices, recompute rather than adding the increase in absolute terms, which silently shrinks your margin percentage.
  • Sanity-checking a competitor-matched price. If matching the market means accepting a thin margin, this shows exactly how thin before you commit.

Common mistakes

  • Using the markup formula to chase a margin target; a 40% markup on cost delivers only about a 28.6% margin.
  • Pricing from purchase cost alone. Freight, duties, packaging, storage, and payment fees all belong in the unit cost you price from.
  • Forgetting percentage fees compound with discounts: a discounted price cuts both your revenue and the margin the fee formula assumed.
  • Copying competitor prices without knowing their costs; a price that works for a high-volume seller may be below your break-even.
  • Never revisiting prices. Costs drift upward over time, and a price set two years ago may quietly be earning half its original margin.

Related calculators

The contribution margin calculator shows what each sale at your chosen price contributes after variable costs, and the Etsy fee calculator estimates the platform fees to price in. The discount percentage calculator helps plan promotions from your list price, while the ROAS calculator and customer lifetime value calculator connect pricing to advertising efficiency and long-run customer value.

Frequently asked questions

How do I calculate a selling price from cost and target margin?
Divide the unit cost by one minus the margin fraction: price = cost / (1 - margin / 100). A product costing 24 priced for a 40% margin sells at 24 / 0.6 = 40, leaving 16 of profit. Dividing rather than multiplying is what keeps the profit at the intended share of the final price.
Should I price using margin or markup?
Both work as long as you apply the matching formula: margin measures profit against the selling price, markup against cost. The same price can be described either way; a 40% margin equals a 66.7% markup. Problems only arise when a margin target is plugged into the markup formula, which underprices the product.
How do I include marketplace fees in my price?
For fees charged as a percentage of the price, extend the denominator: price = cost / (1 - margin / 100 - fee rate / 100). With a cost of 24, a 40% margin target, and a 12% fee used as an example value, the price becomes 24 / 0.48 = 50. Check your platform's current fee schedule, since rates and fee structures vary and change.
What costs belong in the unit cost I price from?
Everything it takes to get one unit into a customer's hands: purchase or production cost, inbound freight and duties, packaging, storage, payment processing, and outbound shipping you absorb. Pricing from the purchase cost alone makes the calculated margin look better than the margin you will actually earn.
How often should I recalculate my prices?
Whenever any input changes: a supplier increase, new shipping rates, a fee change on your sales channel, or currency movement on imported goods. Many sellers also do a periodic review, since costs tend to drift upward gradually and old prices quietly lose margin over time.
All Calculator Suite

Loading precision tools...