Required selling price
Target achievable$42.82
Selling price where expected profit divided by expected retained revenue equals the target margin.
Product Pricing Calculator
Calculate the selling price you need for a target expected profit margin after product costs, fees, advertising, overhead, and expected refunds.
Currency is for display only. Payment and platform fees are amounts you enter; this tool has no marketplace presets. A mathematically profitable price is not necessarily a commercially viable market price. Competition, willingness to pay, brand, demand, and differentiation still matter.
Inputs
Formatting only. The formulas do not convert currencies.
Advanced return assumptions
A fully refunded order is modeled with no retained customer revenue. Product cost, fulfillment/packaging, payment fees, and platform fees each have their own loss rate. Other variable cost, advertising, and allocated overhead are treated as incurred on refunded orders. Defaults are conservative (100% lost).
Results
Target margin
20.0%
Expected profit ÷ expected retained revenue at the required selling price.
Expected profit at target price
$8.14
Expected profit per order if you charge the required target-margin price.
Break-even selling price
$33.98
Selling price where expected profit is zero under these assumptions.
Required price for target profit / order
$44.84
Selling price where expected profit equals the dollar target.
Proposed price analysis
Proposed selling price
Above target price$50.00
Compared with the required target-margin selling price, not with a market or ‘good’ price.
Expected profit / order
Profitable$14.75
Expected-value mix of successful and refunded orders at the proposed price.
Expected margin
31.1%
Expected profit divided by expected retained revenue.
Expected retained revenue
$47.50
(1 − refund rate) × (proposed price + shipping charged).
Payment fee
$1.75
Charged on gross order revenue (price + shipping charged).
Platform fee
$0.00
Charged on gross order revenue at the percentage you entered.
Safe discount headroom
Safe discount amount
$7.18
Maximum price reduction before falling below the selected target expected margin, under the entered assumptions. Not a recommended market discount.
Safe discount percentage
14.4%
Safe discount amount divided by the proposed selling price.
Secondary
Implied markup
61.3%
(Selling price − base product cost) ÷ base product cost. Base product cost is COGS + fulfillment + packaging + other variable + advertising + allocated overhead ($31.00). Informational only; markup is not the target-margin solver.
Breakdown
| Item | Amount |
|---|---|
| Gross order revenue (charged) | $50.00 |
| Expected refund impact (revenue refunded) | -$2.50 |
| Expected retained revenue | $47.50 |
| Expected product cost | -$15.00 |
| Expected fulfillment / shipping | -$5.00 |
| Expected packaging | -$1.00 |
| Expected other variable costs | -$0.00 |
| Expected advertising | -$10.00 |
| Expected allocated overhead | -$0.00 |
| Expected payment processing fees | -$1.75 |
| Expected platform fees | -$0.00 |
| Expected profit | $14.75 |
| Item | Amount |
|---|---|
| Successful-order profit | $17.25 |
| Refunded-order profit | -$32.75 |
| Expected mix (not a single-order result) | $14.75 |
Formula and methodology
Formula
Gross order revenue = selling price + shipping charged to the customer.
Payment fee = gross order revenue × payment percentage + fixed payment fee. Platform fee = gross order revenue × platform percentage.
Successful-order profit = gross order revenue − product cost − fulfillment − packaging − other variable cost − advertising − allocated overhead − payment fee − platform fee.
Refunded-order profit assumes no retained customer revenue: − (product cost × product-cost-lost rate) − ((fulfillment + packaging) × fulfillment-lost rate) − other variable cost − advertising − allocated overhead − (payment fee × payment-fee-lost rate) − (platform fee × platform-fee-lost rate).
Expected profit = (1 − refund rate) × successful-order profit + refund rate × refunded-order profit. Expected retained revenue = (1 − refund rate) × gross order revenue. Expected margin = expected profit ÷ expected retained revenue when retained revenue is greater than zero.
Because payment and platform fees scale with price, expected profit is linear in gross order revenue. The required price is solved algebraically from that line. It is not a simple cost-plus markup, and the UI does not guess by iteration.
Break-even selling price is the price where expected profit equals zero. Target-margin selling price is the price where expected profit ÷ expected retained revenue equals the target margin. Target-profit selling price is the price where expected profit equals the optional dollar target per order.
Safe discount amount = proposed selling price − required target-margin selling price when the proposed price is higher. Otherwise the allowance is zero.
Assumptions
Refunded orders are modeled as fully refunded: no leftover customer revenue. Loss rates control how much product cost, fulfillment/packaging, payment fees, and platform fees remain after a refund. Other variable cost, advertising, and allocated overhead are treated as incurred on refunded orders. Defaults (100% lost) are conservative starting points.
Target margin is expected profit divided by expected retained revenue, not markup on cost. Implied markup is shown separately and does not drive the solver.
The calculator estimates economically required pricing from the numbers you enter. A mathematically profitable price is not necessarily a price customers will pay.
What is included
Product cost, fulfillment, packaging, other variable cost, advertising per order, allocated overhead per order, shipping charged, user-entered payment and platform fees, expected refunds with editable loss rates, a target expected profit margin, an optional target profit per order, and an optional proposed selling price.
What is excluded
Marketplace fee presets, tax/VAT, duties, currency conversion, wholesale or bundle pricing, quantity discounts, competitor scraping, demand or LTV forecasts, and AI price recommendations. The calculator does not claim an optimal market price.
How to price a product
Start from the economics of one expected order: what you keep after product cost, shipping, packaging, ads, overhead you choose to allocate, payment fees, platform fees, and refunds. Then choose a target expected margin and solve backward for the selling price that produces that margin.
That price is a floor for the profit target you selected. Whether you can charge it depends on the market. Use the optional proposed price to test a number you are considering, then compare it with the required target-margin price.
Product pricing formula
Percentage-based payment and platform fees grow as the selling price grows. Adding a markup to cost and stopping there understates the price needed, because the extra revenue also creates extra fees—and refunds still mix in losing orders. The engine therefore solves the linear expected-profit equation for gross order revenue, then subtracts shipping charged to the customer.
Target profit-margin pricing
Target margin means expected profit divided by expected retained revenue equals the percentage you entered. If that equation has no finite nonnegative solution—for example because fees and refunds consume too much of each extra dollar—the calculator reports that the target cannot be reached instead of inventing a huge or infinite price.
Break-even selling price
Break-even is the selling price where expected profit is zero. Below it, the average order loses money under your assumptions. It is not a recommended retail price; it is the economic floor before your chosen profit target.
Price for a target profit per order
If you also enter a dollar profit per order, the calculator solves the same expected-profit line for that amount. Margin and dollars are different goals: a 20% margin and a $10 profit per order generally produce different required prices.
Margin vs markup
Markup and margin are not interchangeable. If cost is $20, a 20% markup is a $24 selling price and $4 profit. Margin is $4 ÷ $24, about 16.67%. A 20% markup is not a 20% margin.
This calculator’s primary solver is target margin. Implied markup is informational: (selling price − base product cost) ÷ base product cost, where base product cost is COGS + fulfillment + packaging + other variable + advertising + allocated overhead. It does not include payment or platform fees and does not drive the required price.
Payment and platform fees
Enter the processing percentage, fixed per-order fee, and marketplace percentage you actually pay. There are no Shopify, Etsy, Amazon, or TikTok presets here. Because those percentages apply to gross order revenue, they are part of the algebraic price, not an afterthought subtracted from a cost-plus number.
Advertising costs and pricing
Advertising cost per order is treated as incurred on both successful and refunded orders. A higher CPA raises every required selling price. If you instead want to know how much you can spend on ads at a known price, use the Break-Even ROAS Calculator.
Refunds and pricing
Expected profit is a mix: most orders succeed, some are fully refunded. Refunded orders keep no customer revenue in this model. Higher refund rates raise the price needed for the same target margin, because losing orders still consume product, fulfillment, ads, and often fees.
Allocated overhead per order
Overhead per order is an allocation you choose, such as tools or rent divided by expected orders. Leave it at zero to price on contribution only. Allocating overhead raises required prices; it does not turn this tool into a full P&L.
Safe discount headroom
When a proposed price is above the required target-margin price, the difference is the maximum reduction that still meets the selected expected margin under your assumptions. If the proposed price is already at or below that required price, headroom is zero. This is not a recommended promotional discount.
Worked example
With the default inputs—$50.00 proposed price, $15.00 product cost, $5.00 fulfillment, $1.00 packaging, $10.00 advertising, 2.9% + $0.30 payment fees, 5% refunds, and a 20% target margin—the required selling price is $42.82. Break-even is $33.98. A $10 expected profit per order requires $44.84.
At the proposed $50.00, expected profit is $14.75 and expected margin is 31.1%. Safe discount headroom is $7.18 (14.4%).
Why an economic price is not necessarily a market price
The output is the price implied by your costs, fees, refunds, and profit target. Customers may not pay it. Competitors, willingness to pay, brand positioning, demand, product differentiation, and market conditions can require a lower price—or allow a higher one. Do not treat the result as a guaranteed optimal selling price.
Limitations
Results are planning estimates, not accounting, tax, or legal advice. The model is a single expected order. It does not forecast demand, convert currencies, apply marketplace fee tables, or optimize promotions. Currency codes format numbers only.
Frequently asked questions
Is the required selling price what I should charge?
It is the price that meets your entered target margin under your assumptions. Whether that price sells is a market question this calculator does not answer.
Why can't I just add a markup to cost?
Percentage fees and expected refunds depend on price. Cost-plus markup ignores that feedback. The algebraic solver includes it.
Does this include Shopify or Amazon fees automatically?
No. Enter the percentages you pay. For sourced Shopify payment presets and profit at a known price, use the Shopify Profit Calculator.
How do I estimate profit at a price I already have?
Enter it as the proposed selling price here, or use the E-commerce Profit Calculator when you want monthly rollups and break-even CPA at that price.
Are taxes included?
No. Sales tax, VAT, duties, and income tax are excluded. If you bear a per-order tax amount, add it as another variable cost.
Related tools
To estimate profit at a known selling price, use the E-commerce Profit Calculator or the Shopify Profit Calculator. To solve for advertising efficiency at a known price, use the Break-Even ROAS Calculator. For Etsy-specific fees on a completed order, use the Etsy Fee Calculator. For TikTok Shop US referral fees on a completed order, use the TikTok Shop Fee Calculator. See all listed tools on the calculators page.