Product pricing calculator

How it is worked out

• Price = (product cost + shipping + per-order card fee) divided by (1 minus the card fee % minus the margin you want).
• Markup = price divided by product cost. Margin = what you keep, as a share of the price.
• Margin and markup are not the same: a 40% margin here needs a 2.53x markup, because shipping and fees come out of the price too.

Example: a desk organizer that costs $12

• Product $12.00, shipping $5.00, card fees 3% plus $0.30.
• For a 40% margin before ads, the price is $30.35.
• At $30.99 the store keeps $12.76 per order, 41.2% of the price.
• Ads still come out of that $12.76. Check the most you can pay per order with the break-even ROAS calculator.

Questions

How do you calculate selling price using margin?

• Selling price = cost per order divided by (1 minus the margin you want, minus card fee %).
• $17.30 of costs at a 40% margin and 3% fees gives $17.30 / 0.57 = $30.35.

How do you price a product to make a profit?

• Add up everything one order costs you, including shipping and fees.
• Price so the margin left still pays for ads per order. Price from cost alone and ads can eat all of it.

What is the difference between margin and markup?

• Markup compares price with cost: $12 sold at $30 is a 2.5x markup.
• Margin is what you keep as a share of the price, after every cost. The same product can have a 150% markup and only a 40% margin.

Should shipping cost be in the price?

• If you offer free shipping, yes. It comes out of every order.
• This calculator adds it before working out the margin. If customers pay shipping, enter 0.

How much margin should I price for?

• Enough to pay for ads and still keep something. $12 in ads per order on a $12.76 margin leaves 76 cents.
• Work out your ad cost per order first, then price above it.