Work backwards from the order economics
Product pricing reverses a cost-and-profit model to find a selling price. Start with fixed amounts per order such as product cost, fulfillment, packaging, labor, acquisition cost and fixed transaction fees. Then enter percentage expenses, customer shipping revenue and any planned discount. The result is a required list price under your selected goal. It is not a prediction of customer willingness to pay, a competitor analysis or a guarantee that the product will sell at that price.
The formula
Keep currency, units and time periods consistent. Percentage inputs use percentage points (enter 5 for 5%). Results are rounded only for display; tiny nonzero values may use scientific notation. Undefined ratios are shown as unavailable.
Fixed per-order costs of $40, percentage fees and returns of 10%, and a 20% margin target require $57.14 total revenue. With $5 customer shipping revenue, merchandise revenue must be $52.14. Reversing a planned 10% discount gives a list price of $57.94. Use full precision until display; a real selling price may need to round upwards.
Choose margin, profit or markup
Target Margin reserves a percentage of total order revenue after the entered costs. Target Profit reserves a fixed currency amount per order. Target Markup reserves profit as a percentage of the fixed per-order cost base, while still grossing up revenue for percentage fees and returns. These goals use different denominators and can produce different prices from the same percentage. The markup definition is stated explicitly so it is not confused with markup on product cost alone.
Why percentage fees change the solution
A fee charged as a percentage of revenue grows when the selling price rises. Adding today’s fee amount to cost and then applying a margin does not fully account for that relationship. The calculator solves for the revenue remaining after the combined percentage cost rate and, in margin mode, the target margin. If those shares consume one hundred percent or more of revenue, no positive denominator remains. Review the cost rates or target instead of treating an unavailable price as a software error.
Customer shipping and planned discounts
Customer shipping is part of modeled total revenue. The required merchandise revenue subtracts that charge from required order revenue, and the list price then reverses the planned discount. This keeps the intended revenue after the promotion. A discount entered here applies to merchandise, not to the separate customer shipping charge. If shipping revenue alone exceeds the required total, merchandise price is floored at zero and the explanation highlights the case; it does not propose a negative product price.
Review the implied outcome
The result shows the list price, merchandise revenue after discount, total order revenue, estimated profit and implied margin. These values make it possible to check whether the chosen goal matches your intention. Currency values are rounded for display while the calculation keeps full precision. When setting a real checkout price, rounding upwards may be necessary to avoid falling slightly below the goal. Commercial price points, tax display and marketplace rules require separate consideration outside this mathematical model.
Connect pricing with operational review
Use the what-if controls to examine how COGS, advertising, shipping or a planned discount changes the required price. If the required price is commercially unrealistic, the result suggests reviewing the underlying costs and goal rather than assuming customers will accept it. Include expected refund costs consistently and avoid counting the same expense twice. Ecommerce Profit can check the resulting order economics with overhead, while Discount Profit helps compare a promotion with an existing regular-price baseline and the sales volume needed to replace it.
Method and reference sources
Method and content checked 2026-09-20. These sources provide background, not endorsement or professional certification. The formula and limitations above define this calculator.
- SBA — Break-even pointContribution, variable costs and fixed-cost break-even context; tool-specific extensions are explained above.
Frequently asked questions
Should I round the recommended selling price down?
Rounding down can miss the entered profit target. Check your chosen market price by feeding it back into the profit calculator, especially when discounts and percentage fees apply.
What is a worked example for Product Pricing?
Fixed per-order costs of $40, percentage fees and returns of 10%, and a 20% margin target require $57.14 total revenue. With $5 customer shipping revenue, merchandise revenue must be $52.14. Reversing a planned 10% discount gives a list price of $57.94. Use full precision until display; a real selling price may need to round upwards.