Product Pricing Calculator

How to price a product

Good pricing works in one direction: costs first, then fees, then profit. Add up everything one unit costs you, add the slice of your monthly overhead that unit should carry, then work out the price that leaves your target profit after payment fees are taken out. Guessing from a competitor's price tag skips all three steps.

Notice that you can't simply add 40% to your cost to get a 40% margin. Margin is measured against the selling price, so the calculator divides rather than multiplies — that's why the recommended price is higher than a naive markup.

Understanding product costs

• Materials or inventory — the physical stuff, or the wholesale price you paid for a resale item.
• Direct labor — your making time, priced at a real hourly rate.
• Packaging and shipping supplies — boxes, mailers, labels, tissue, tape.
• Other variable costs — anything that grows with each sale, like a per-unit licence or breakage allowance.
• Overhead — rent, software, insurance and subscriptions, divided by the units you expect to sell that month.

Margin versus markup

Markup compares profit to your cost. Margin compares profit to your selling price. They describe the same dollar of profit from different angles, and confusing them is the fastest way to under-price.

A product that costs $10 and sells for $15 carries a 50% markup but only a 33% margin. The calculator shows both so you can talk to suppliers in markup and to your accountant in margin.

A worked example

Say a candle costs $8.00 in materials, $4.00 in labor, $2.00 in packaging, $1.00 in shipping supplies and $0.50 in other costs — $15.50 of direct cost. With $500 of monthly overhead across 100 units, another $5.00 is allocated per unit, so the true cost is $20.50.

Targeting a 40% margin with a 3% + $0.30 payment fee, the recommended price is roughly $36.49. After fees of about $1.39, you keep around $14.60 per candle — about $1,460 of profit on 100 sales. Load the sample numbers above to see it live.

Common pricing mistakes

• Leaving your own labor out of the cost entirely.
• Forgetting overhead, so profit quietly pays the rent instead of paying you.
• Ignoring payment and marketplace fees, which can swallow 3–15% of every sale.
• Adding a percentage to cost and calling it a margin.
• Copying a competitor whose costs and volumes are nothing like yours.
• Never revisiting prices when material costs rise.

Frequently asked questions