Product Pricing Calculator
Calculate the right selling price for your product based on cost of goods, desired profit margin, and overhead costs.
Materials, manufacturing, or sourcing cost per unit
Percentage of selling price that is profit
Shipping, packaging, platform fees per unit
Results
Minimum Price (breakeven)
$11.00
Suggested Retail Price
$22.00
Profit Per Unit
$11.00
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How This Calculator Works
Pricing is the most important decision in any product business. Price too low and you cannot sustain operations. Price too high and customers choose competitors. This calculator uses the margin-based pricing formula to find the right selling price for your cost structure.
The formula works by dividing your total cost per unit (materials plus overhead) by one minus your desired margin. For example, if your total cost is $11 and you want a 50% margin, the price is $11 / (1 - 0.50) = $22. This ensures that exactly 50% of the $22 selling price — which is $11 — is profit.
The "minimum price" is your breakeven point where you cover costs but make zero profit. Never price at or below this number. The suggested retail price gives you the margin you need to cover marketing, reinvestment, unexpected costs, and actual profit. If the suggested price feels too high for your market, either reduce costs or accept a lower margin.
Frequently Asked Questions
What is the difference between markup and margin?
Markup is based on cost: a $10 item with 50% markup sells for $15. Margin is based on selling price: a $10 item sold for $20 has a 50% margin. This calculator uses margin because it directly tells you what percentage of each sale is profit.
What profit margin should I target?
It depends on your industry. Digital products can sustain 70-90% margins. Physical products typically range from 30-60%. Commodity items might only achieve 10-20%. Higher margins give you room for marketing spend and occasional discounts.
Should I include my time as a cost?
For physical products, include your labor time as part of cost of goods if you make items by hand. For digital products where the marginal cost is zero, your time is already accounted for in the development investment — the per-unit cost is just overhead.
How do platform fees affect pricing?
Include platform fees (Etsy, Shopify, payment processing) in your overhead per unit. Etsy takes roughly 9-12% per transaction including listing, transaction, and payment processing fees. Build this into your price so it does not eat your profit.