Pricing Calculator
Calculate target selling price from unit costs, target profit margins, and platform transaction fees.
Cost & Margin Targets
Required *Notice: Currency selection changes how amounts are displayed; it does not convert exchange rates.
Pricing Model Results
Estimated price needed to achieve your 40.00% target profit margin.
Understanding Target Margin Pricing
Target margin pricing works backward from your cost of goods sold (COGS) to calculate the exact selling price needed to secure your required net profit percentage.
Base Pricing Formula
Recommended Price = Unit Cost ÷ (1 − Target Margin)For example: With a $25 cost and a 40% target margin, Price = $25 ÷ (1 − 0.40) = $25 ÷ 0.60 = $41.67.
Fee-Adjusted Pricing Model
When selling via e-commerce marketplaces or credit card processors, payment providers deduct a percentage fee ($r$) plus a fixed flat fee ($F$). To protect your target margin ($m$), the selling price ($P$) must absorb these deductions:
P = (Unit Cost + Fixed Fee) ÷ (1 − Percentage Fee − Target Margin)This guarantees that after the platform takes its transaction fee and you cover your unit cost, your remaining net profit equals exactly your desired target margin of gross customer revenue.
Step-by-Step Pricing Worked Example
Scenario: Unit Cost = $30.00, Target Margin = 25%, Processor Fee = 3% + $0.30
- 1. Combined Deduction = 1 − 0.03 − 0.25 = 0.72
- 2. Total Cost Base = $30.00 + $0.30 = $30.30
- 3. Recommended Price = $30.30 ÷ 0.72 = $42.08
- 4. Fees Paid = (42.08 × 3%) + $0.30 = $1.56
- 5. Net Profit = $42.08 − $1.56 − $30.00 = $10.52 (25.00% net margin)
Frequently Asked Questions
What is the difference between pricing with margin vs markup?▼
Target profit margin is the percentage of the final selling price that remains as profit. Markup is the percentage added directly onto the cost. For example, setting a 50% markup on a $100 cost yields a $150 price, which delivers a 33.33% margin ($50 / $150), not 50%.
How do transaction and platform fees affect product pricing?▼
Payment processors and marketplace platforms deduct percentage and flat fees from your gross checkout total. If you do not adjust your price upward to absorb these deductions, your realized net margin will fall below your target.
Why does the calculator say a target margin is impossible?▼
If your target profit margin percentage plus platform transaction fee percentage equals or exceeds 100%, the equation has no valid solution because combined percentage deductions would exceed the entire customer payment.
Is the recommended price a commercial guarantee?▼
No. The calculator models the exact price needed to hit mathematical profit goals based on your cost assumptions. You must also evaluate customer willingness to pay, competitor pricing, and market demand.
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