Product pricing

Rather than picking a price because it “sounds about right,” this calculator works backwards from the profit margin you actually want, so your price is built on a number you chose on purpose.

It can help you answer questions like:

• What should I actually charge to hit my target profit margin?
• Am I currently underpricing what I sell?
• How much room do I have to discount before my margin gets too thin?

What you’ll need to enter:

• Cost per unit — what it actually costs you to make or buy one item. (Example: $25.)
• Desired margin — the percentage of the final selling price you want left as profit, after covering that cost. Keep this under 100%. (Example: 35%.)

How it works
We work backwards from your cost and your target margin to find the selling price that leaves you with exactly that margin, rather than just adding a flat markup on top of cost.

What the result tells you
With the example numbers, a $25 cost at a 35% margin means pricing at about $38.46 — a markup of roughly 54% on cost.

A few things worth knowing about pricing from margin:

1. Margin and markup aren’t the same thing. A 35% margin is not the same as a 35% markup on cost — this calculator shows you both, so you’re never caught out by the difference.
2. Check your price against the market. If the price that gives you your target margin is well above what competitors charge, you may need to either accept a lower margin or find a way to justify the higher price (quality, service, speed).
3. Revisit pricing when costs change. If your supplier costs go up, your price needs to move too if you want to protect the same margin — re-run this calculator any time your cost per unit changes.
4. Different products can have different targets. Not every product needs the same margin — you might accept a lower margin on a popular item that brings in other sales.

In short: pricing from your target margin, rather than guessing, protects your profit as your costs change over time.