Pricing Calculator
Use this pricing calculator to turn a unit cost and target profit margin into a selling price, with the profit per unit and markup shown alongside.
What it does
The Pricing Calculator turns a unit cost and a target profit margin into the selling price you should charge. It shows the price, the profit per unit, and the equivalent markup on cost so you can price with confidence.
Data sources & parameters
This calculator uses standard financial formulas and runs entirely in your browser. It needs no external rate data — your result is computed only from the values you enter above.
We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.
The formula
price = unit_cost ÷ (1 − margin), profit = price − unit_cost, markup = profit ÷ unit_cost
How it works
You enter what one unit costs you and the profit margin you want to keep as a share of the selling price. The tool divides the cost by one minus that margin to find the price, then reports the profit and the markup the price represents.
Where it is used
- Setting a retail or wholesale price from a known cost
- Checking whether a target margin leaves an acceptable price
- Translating between margin on price and markup on cost
Worked example
A product costs $40.00 to make and the owner wants a 50% margin. The selling price works out to …, giving … of profit per unit, which is a … markup on cost.
What the pricing calculator does
The pricing calculator works out what to charge from the cost of a single unit and the profit margin you want to keep. It returns the selling price, the profit per unit at that price, and the markup the price represents on your cost.
Pricing is often done by feel. A price set slightly too low erodes every sale, while one set too high loses customers you never see. The calculation gives a repeatable starting point for every product, service, or line item.
Margin and markup
Treating margin and markup as interchangeable is the most common pricing mistake, and it leads to prices that are far off target.
Margin is profit as a share of the selling price: sell something for 100, keep 30 as profit, and your margin is 30%. Markup is profit as a share of the cost: if that item cost you 70, your markup is 30 divided by 70, about 43%.
Because the bases differ, the same price gives two different percentages. A 50% margin is a 100% markup, and a 40% margin is roughly a 67% markup; the gap widens as margins climb. The calculator asks for the margin, because it maps onto profitability, and shows the markup alongside for conversations with suppliers and buyers.
The formula
- Price = cost ÷ (1 − margin)
- Profit = price − cost
- Markup = profit ÷ cost
Adding the margin percentage to the cost would give a markup, not a margin. To keep 30% of the final price as profit, the cost has to be the remaining 70%, so you divide by 0.70 instead of multiplying by 1.30. Getting this backwards is how underpricing happens.
How to use the calculator
- Enter the unit cost: everything it takes to make or buy one unit.
- Enter the profit margin you want to keep as a percentage of the selling price.
The calculator displays the selling price, the profit per unit, and the markup on cost, and the donut chart shows how the price splits between cost and profit.
The result is only as good as the cost figure. A unit cost that includes only the obvious inputs produces a price that looks profitable but is not. Include materials, direct labour, packaging, payment processing fees, and a fair share of shipping and returns.
Choosing a target margin
The right margin depends on your industry, your costs, and your competition. Grocery retail runs on thin margins and high volume, while software and luxury goods sustain very high margins. Use what is typical in your sector as a benchmark.
The margin also has to absorb costs that never reach the unit cost: rent, salaries, marketing, software, and the occasional discount or write-off. A margin that looks generous on a single unit can disappear once those overheads are spread across your sales, so err on the conservative side.
Using the results
The calculated price is consistent with your target margin, but the market has its own opinion. Compare it with competitor prices and with what customers currently pay. If it sits far above the market, your costs are too high or your margin target is unrealistic; if far below, you may be leaving money on the table.
- Raise the margin a few points and watch how quickly the price climbs; small margin changes move the price more than most people expect.
- Lower the cost and see how much room that creates. Reducing cost is often a faster route to profit than raising the price.
- Compare the markup figure with how your suppliers quote, so a negotiation never catches you out.
Common pricing mistakes
- Confusing markup for margin. Adding your target percentage to cost gives a markup, which produces a lower margin than intended.
- Undercounting the cost. Leaving out fees, shipping, or returns makes the margin look healthy while the real one is much thinner.
- Copying a competitor's price without knowing their costs. Their margin at that price may be very different from yours.
Run the calculator across your whole range to see which products carry the business and which barely break even, and revisit the figures as your costs move.
This article is general information only and is not financial advice.
About This Pricing Calculator
Use this pricing calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.
Frequently asked questions
How does the pricing calculator work?
What is the difference between margin and markup?
Why can't I use a margin of 100% or more?
Should I price for margin or for markup?
Does the price include tax?
Is my data kept private?
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