Free Business Tool
Pricing & Margin Calculator
Calculate true cost per sale, set a target margin and see what each discount does to profit.
Business Type
Choose the business you want to model.
Include purchase cost, inbound shipping, packaging, marketplace fees and returns allowance before judging the product margin.
Typical starting values. Edit them to match your business.
Inputs
Product costs and target margin.
Target Price
Price the unit for the margin you want.
Recommended Product Price$118.35
Pricing Health
Viable
- Your price covers variable costs.
- Expected monthly sales cover fixed costs.
- Expected monthly profit is below the target entered.
Break-evenBreak-evenThe sales volume where gross profit covers fixed costs. Example: $8,000 fixed costs divided by $40 profit needs 200 sales.
373
You need approximately 373 units per month before the business stops losing money.
See cost breakdownVolume Scenarios
What happens when volume changes?
Compare revenue, variable cost, fixed cost and net profit at different monthly volumes. The rows use your current price and cost inputs.
| Volume | Revenue | Variable CostVariable CostAdds Product cost ($32.00), Marketplace fees ($11.88), Shipping in ($7.00), Returns ($3.00), Packaging ($2.50), Card fees ($2.38) for each unit, then multiplies that cost by the volume in each row. | Fixed CostsFixed CostsAdds Monthly Fixed Costs ($15,000.00). These monthly costs stay the same across the volume scenarios. | Net Profit |
|---|---|---|---|---|
| $20,790.00 | $12,338.76 | $15,000.00 | -$6,548.76 | |
| $41,580.00 | $24,677.52 | $15,000.00 | $1,902.48 | |
| $62,370.00 | $37,016.28 | $15,000.00 | $10,353.72 | |
| $83,160.00 | $49,355.04 | $15,000.00 | $18,804.96 |
Cost Breakdown
Where each dollar goes.
Product selling price: $99.00
Hover, tap or focus a segment to inspect it.
Plain English Summary
The operating read.
To reach a 48.0% gross margin, the recommended selling price is $118.35.
At that price, each unit would contribute $56.81 before fixed expenses.
Discount Impact
Test what a discount really costs.
A 10% discount reduces revenue by 10%. In this scenario, it reduces profit per sale by 21.1%.
To earn the same total gross profit at the discounted price, you need about 113 units beyond the current monthly volume.
Margin vs Markup
Two numbers that are easy to confuse.
These figures use the current unit inputs, so the explanation changes as your price and costs change.
Margin compares profit with selling price. Here, $56.81 profit divided by $118.35 creates a 48.0% margin.
Markup compares profit with cost. The same $56.81 profit divided by $61.54 creates a 92.3% markup.
Common Mistakes
Most pricing errors begin before the price is entered.
A 92.3% markup does not mean a 92.3% margin. In this scenario, the margin is 48.0%.
A 10% discount reduces profit per unit by 21.1%, which is why discounts deserve caution.
Fees, packaging and delivery look harmless alone. Together, they decide whether the unit is worth selling.
FAQ
Pricing and margin questions.
What is gross margin?
Gross margin is the percentage of revenue left after variable costs are removed. It shows how much of each sale remains before fixed costs and overheads.
What is markup?
Markup measures how much profit is added on top of cost. If something costs $50 and sells for $75, the markup is 50 percent.
What is the difference between margin and markup?
Margin compares profit with selling price. Markup compares profit with cost. The same sale can have a 33.3 percent margin and a 50 percent markup.
How do I calculate break-even sales?
Divide monthly fixed costs by profit per sale. If fixed costs are $8,000 and profit per sale is $35, the business needs about 229 sales to break even.
What is a good profit margin?
A good margin depends on the industry, cost structure and operating model. The useful question is whether the margin covers fixed costs, supports growth and leaves enough profit for the risk involved.