Pricing & profit tools · 01

Product Pricing Calculator

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Free tool - no sign-up - runs in your browser

Set a selling price from what each unit really costs you - product cost, packaging, payment fees and VAT - and the margin you want to keep. Add your volume and fixed costs to see what that price earns over a period.

Product pricing calculator

Filled with example values. Replace them with your own.

Currency and period

A product, an hour, a job, a seat... every result uses this word.

Cost of one unit

Cost of the goods themselves: purchase price or materials and direct labour per unit.

Per unit: packaging, shipping you pay, commissions. Not fixed overheads.

Target margin
Payment and marketplace fees

Card processing or marketplace commission, as a % of the price after discount.

For example a per-transaction charge.

Spreads the per-order fee across the units in an order.

Tax and discount

Tax collected for the government is not your revenue, so it is removed before any margin is calculated.

Planned average discount. The price is raised so the margin survives it.

Volume and fixed costs (optional)

Add these to see profit and break-even for the period.

Optional. Shows the margin your current price actually earns.

Price to charge

– / unit

Price you keep (after discount and VAT)
–
Contribution per unit
–
Contribution margin
–
Gross margin
–
Markup on product cost
–
Fees per unit
–
VAT / GST per unit
–
Most you can spend to win one sale
–

Over the period / month

Revenue (excl. VAT)
–
Modeled operating profit
–
Break-even sales
–
Margin of safety
–

Price at other target margins

Target marginPrice to chargeMarkup
Compare scenarios with these numbers Find break-even with these numbers
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    How to use it

    1. Enter what one unit costs you: the product itself, then any other cost that comes with every sale, such as packaging or shipping you pay.
    2. Enter the margin you want to keep, and choose how to measure it. Margin after all variable costs is the safer choice when you pay card or marketplace fees.
    3. Add percentage fees and any fixed fee per order. If your price includes VAT or GST, switch it on so the tax is removed before the margin is calculated.
    4. Optionally add units sold and fixed costs for the period to see modeled profit, break-even and how your current price compares.

    The formulas

    The calculator works out the price you keep first, then adds back VAT and the discount to give the price to charge.

    • Price you keep = (product cost + other variable costs + fee per order / units per order) / (1 - percentage fees - target margin)
    • Price you keep for a gross margin = product cost / (1 - target margin)
    • Price to charge = price you keep x (1 + VAT rate) / (1 - discount)
    • Contribution per unit = price you keep - product cost - other variable costs - fees

    A target margin only has a price when the margin plus percentage fees stay below 100%. Above that, every extra dollar of price is eaten by fees and the target cannot be reached; the calculator says so instead of printing a meaningless number.

    Worked example

    A seller's product costs $18, packaging and shipping add $4, and the card processor charges 2.9% plus $0.30 per order (one unit per order). They want to keep 35% of the price after all variable costs.

    • Price you keep = ($18 + $4 + $0.30) / (1 - 0.029 - 0.35) = $22.30 / 0.621 = $35.91
    • Fees on $35.91 = $1.04 + $0.30 = $1.34, so contribution = $35.91 - $18 - $4 - $1.34 = $12.57, which is 35% of the price.
    • Measured on product cost alone, the same price is a 49.9% gross margin and a 99.5% markup - three honest numbers for one price, which is why the basis must always be stated.
    • Selling 400 units a month with $3,000 of fixed costs, modeled operating profit is $2,027 a month and break-even is 239 units.
    • If the price includes 20% VAT, the price to charge becomes $43.09: the extra $7.18 is tax collected for the government, not margin.

    Questions

    What margin should I aim for?

    There is no universal number. Margins differ widely by industry, and the right one is the margin that covers your fixed costs at the volume you can realistically sell. Use the volume section or the break-even calculator to test whether your margin does that.

    Should the price include VAT or sales tax?

    In the U.S., sales tax is normally added at checkout, so leave the VAT switch off. In the UK, the EU, Australia and many other countries consumer prices are shown including VAT or GST; switch it on so the tax is removed before any margin is calculated.

    How do I price a service?

    Define the unit first - one hour, one job or one project - and change the unit word at the top. Put the cost that comes with each unit, such as a contractor's hourly rate, under variable costs, and salaries you pay anyway under fixed costs. Never enter the same labour in both places.

    Why is my gross margin higher than my target?

    Because gross margin ignores packaging, shipping and fees. If you set the target on contribution margin, the gross margin of the same price is always higher. That gap is money that leaves with every sale.

    Assumptions and limits

    • One product or service line and one period at a time.
    • Costs are constant per unit: no volume discounts from suppliers, no capacity limits.
    • Refunds, returns, chargebacks, income tax and financing costs are not included.
    • The price is mathematically exact; rounding to a price point such as $35.99 is your decision.

    Sources and method

    Reviewed by The Business Radar editorial team Last reviewed October 2026

    These tools model your own inputs with standard formulas. They are for planning and education, not financial, tax or legal advice.

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