Solve for the price that hits your target margin — with markup, break-even, and volume math.
Add unit costs, set a target margin, see the suggested price and monthly profit. Compare across margin tiers, see industry norms, and find your break-even volume.
Direct answers to the most common questions, in plain language. Skim if you're in a hurry; dig deeper below.
Cost + target margin = price.
Two main approaches: cost-plus pricing (add a fixed margin to cost) and value-based pricing (charge what customers will pay). Start with cost-plus to set a floor, then test value-based to find the ceiling.
Markup is on cost; margin is on price.
Markup = (price − cost) ÷ cost. Margin = (price − cost) ÷ price. A 100% markup is a 50% margin. They're different math, easy to confuse — this calculator shows both.
Product: 30–60%. Software: 70–90%. Retail: 20–40%.
Healthy gross margins vary by industry. Physical products: 30–60% gross margin is typical. SaaS: 70–90%. Restaurants: 60–70% (food cost). Retail: 20–40%. Below these, the business is fragile.
Either works; free shipping converts better.
Most e-commerce data shows "free shipping" (with cost built into price) converts 20–40% better than identical "price + shipping" displays. Build it in and round up the price, or test both.
The mechanics in short answers — no jargon, no upsell.
Materials + labor + shipping in + packaging + any per-unit fees. This is your cost-of-goods-sold (COGS) per unit.
Margin = (price − cost) ÷ price. A 50% margin means cost is 50% of price; you keep 50% as gross profit.
Price = cost ÷ (1 − margin). At $20 cost with 50% margin target: $20 / 0.50 = $40 price.
Cost-plus is the floor. The market may pay more (value-based) or refuse to pay your cost-plus price. Test against competitor pricing.
Designed so anyone can model their situation in under a minute, with or without a finance background.
Set a target margin and see the price instantly.
Both numbers shown — the right one for the question.
See profit on 100, 1,000, 10,000 units.
Materials, labor, shipping, fees — separate lines.
How many units to cover fixed costs.
See pricing at 30/40/50/60% margin instantly.
Everything you might ask before, during, or after using this tool.
Markup % = (selling price − cost) ÷ cost × 100. If you buy for $50 and sell for $75, markup = $25 / $50 = 50%. Markup is the number you add to cost; it's easy to compute but easy to confuse with margin.
Margin % = (selling price − cost) ÷ selling price × 100. Same $50 cost, $75 price: margin = $25 / $75 = 33.3%. Margin measures profit as a share of revenue — the number that ties to financial statements.
Margin for financial reporting and gross profit analysis (it ties to revenue). Markup for pricing decisions on individual SKUs (it's easier to apply: cost × 1.5 = price). Pros use both — know which you're looking at.
Two layers: (1) blended hourly rate to cover salary + benefits + overhead + profit; (2) packaging — value-based pricing per deliverable. Most service businesses underprice. Start with desired annual revenue ÷ billable hours and add a margin.
Add fulfillment fee, referral fee (~15%), storage, returns reserve, ad spend reserve (5–10%). Many sellers list at "the price that beats my competitor" and discover their margin is negative. Build the fee stack into the cost-plus calc.
Only if you can match their cost structure. Matching a lower competitor price with higher costs means burning capital to "stay competitive" until you run out. Differentiate on something other than price if you can't win on cost.
A 20% discount on a 40% margin product cuts your margin to 25% — that's 38% less profit per unit. Frequent discounting is margin theater unless you have meaningful operating leverage from volume.
When your margin is below industry norms, when costs have risen, when you have demand exceeding supply, or when you've added enough value. Tip: most businesses raise prices too rarely. Annual 3–5% increases usually go unnoticed and rebuild margin.
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Cost-plus tells you the minimum price that yields a target margin. It does not tell you what customers will pay.
The right price is usually somewhere between cost-plus (floor) and what customers would pay before they walk away (ceiling). Test toward the upper end.
100% markup ≠ 100% margin. A 100% markup ($10 cost, $20 price) is a 50% margin.
Internally, manage in margin (it ties to financial statements). Externally for pricing decisions, markup is easier math.
Confusing these is a classic small-business mistake — pricing for "50% markup" when you meant "50% margin" is a 30% under-price.
SaaS: 70–90% gross margin (high) — almost no marginal cost.
Physical product (D2C): 40–60%.
Restaurant: 60–70% food gross margin (operating margin is much smaller after labor).
Retail: 20–40%.
Distribution / wholesale: 10–25%.
Knowing your industry's norm is the fastest sanity check on your pricing.
When your product saves customers far more than it costs (B2B SaaS often).
When you have a strong brand or scarce inventory (luxury, art).
When competitors don't exist or are dramatically inferior.
In those cases, cost-plus dramatically under-prices and leaves money on the table.
Two short notes worth reading before you trust any number on this page.
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We are not a bank, NBFC, advisor, broker, or distributor of any financial product. The numbers shown here are estimates for educational purposes only, based on the inputs you provide.
Results are not financial, legal, or tax advice. Please consult a qualified professional before any decision about your loan, investments, or personal finances. Actual loan terms and charges depend on your bank and individual circumstances.
