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Product Pricing Calculator

Work out the selling price you need after every cost of an order, not just the product: shipping, payment and platform fees, refunds and ad cost. Choose a target margin or a target profit per order.

How do you price a product?

Add up the costs that stay the same whatever you charge: product, shipping, ads and any fixed payment fee. Then divide by what is left of the price after percentage costs (payment, platform and refund rates) and your target margin come out: price = per-order costs / (1 - percentage costs - target margin).

Your goal and the costs of one order

Treat one order as one unit: enter the costs of a typical order. Leave any line that does not apply empty.

What you want to make

Choose a target margin or a target profit per order.

Pricing goal

Product and delivery

What the product and getting it to the customer cost you on each order.

Fees and refunds

Costs charged as a share of the price, plus any fixed payment fee.

Advertising

Optional. Leave it empty to price before ad spend.

The formula

How the selling price is calculated

Price for a target margin = Per-order costs / (1 - Percentage costs - Target margin); Price for a target profit = (Per-order costs + Target profit) / (1 - Percentage costs); Break-even price = Per-order costs / (1 - Percentage costs)

Percentage costs come off the price itself, so they sit in the divisor instead of being added to cost. In the formula, write percentages as decimals: 2.9% is 0.029.

Per-order costs
Product cost + shipping and packaging + fixed payment fee + ad cost per order: the costs that stay the same whatever you charge.
Percentage costs
Payment fee % + platform fee % + refund rate %: the share of every sale that goes in fees and refunds.
Target margin
Net profit as a share of the selling price, after every cost above.
Target profit
The amount you want each order to leave after every cost above.
Break-even price
The lowest price at which an order covers all of its costs and leaves nothing.
Markup on product cost
(Price - Product cost) / Product cost. It compares the price with product cost only, so it reads higher than margin.
Price rounded up to .99
The recommended price rounded up to the next .99, so profit never falls below your goal.
  • Refunds count the whole price of a refunded order as lost, with its costs already spent. That is a cautious assumption: resold returns and fees a provider gives back would lower the real cost.
  • Each order is treated as one unit. For an order with several units, enter the costs of the whole order and read the result as the price of the order.
  • A target cannot be reached when percentage costs plus the target margin reach 100%, because the divisor is then zero or negative.
  • Nothing is pre-filled, so enter your own rates.

Worked examples

Three pricing calculations, worked through

Each example follows the same steps as the calculator above. The amounts work in any currency.

Example 1

Own store: a 30% margin after shipping and payment fees

A product costs 14.00. Shipping and packaging cost 5.00 per order and the payment provider charges 2.9% + 0.30. You want a 30% net margin.

Inputs

Product cost (COGS)
14.00
Shipping and packaging
5.00
Payment fee
2.9% + 0.30
Target margin
30%

Working

  1. Per-order costs: 14.00 + 5.00 + 0.30 = 19.30
  2. Price: 19.30 / (1 - 0.029 - 0.30) = 19.30 / 0.671 = 28.76
  3. Profit: 28.76 x 30% = 8.63
  4. Break-even price: 19.30 / (1 - 0.029) = 19.88
  5. Rounded up to the next .99: 28.99, which leaves 8.85 (30.5%)

Selling price

28.76 per order (30.0% margin)

Pricing the same product for a 30% margin on product cost alone gives 14.00 / 0.70 = 20.00, which leaves 0.12 after shipping and payment fees.

Example 2

Marketplace seller: every cost, refunds and ads included

A product costs 22.00 and shipping is 6.50 per order. The payment provider charges 2.9% + 0.30, the marketplace takes 10%, 5% of orders are refunded and ads cost 9.00 per order. You want a 20% net margin.

Inputs

Product cost (COGS)
22.00
Shipping and packaging
6.50
Payment fee
2.9% + 0.30
Marketplace fee
10%
Refund rate
5%
Ad cost per order
9.00
Target margin
20%

Working

  1. Per-order costs: 22.00 + 6.50 + 0.30 + 9.00 = 37.80
  2. Percentage costs: 2.9% + 10% + 5% = 17.9%
  3. Price: 37.80 / (1 - 0.179 - 0.20) = 37.80 / 0.621 = 60.87
  4. Profit: 60.87 x 20% = 12.17
  5. Break-even price: 37.80 / (1 - 0.179) = 46.04

Selling price

60.87 per order (20.0% margin)

Product cost is only 36.1% of the 60.87 price. Payment fees, marketplace fees and refunds take 18.4%, advertising 14.8% and shipping 10.7%, which leaves 20.0%.

Example 3

Pricing for a profit per order

A product costs 18.00, shipping is 4.00 per order, the payment provider charges 2.9% + 0.30, 3% of orders are refunded and ads cost 6.00 per order. You want each order to leave 12.00.

Inputs

Product cost (COGS)
18.00
Shipping and packaging
4.00
Payment fee
2.9% + 0.30
Refund rate
3%
Ad cost per order
6.00
Target profit
12.00

Working

  1. Per-order costs: 18.00 + 4.00 + 0.30 + 6.00 = 28.30
  2. Percentage costs: 2.9% + 3% = 5.9%
  3. Price: (28.30 + 12.00) / (1 - 0.059) = 40.30 / 0.941 = 42.83
  4. Net margin: 12.00 / 42.83 = 28.0%
  5. Break-even price: 28.30 / (1 - 0.059) = 30.07

Selling price

42.83 per order (12.00 profit)

A 12.00 profit target works out to a 28.0% net margin. Rounded up to 42.99, the order leaves 12.15.

The guide

Pricing a product for an online store

Why cost plus markup misses your fees

Adding a markup to product cost prices from one cost only. Payment fees, marketplace fees and refunds are charged on the price itself, so the higher the price, the more they take, and a markup that looked right before fees leaves less than planned afterwards. That is why this calculator divides by what is left of each sale instead of adding a percentage on top. The markup calculator covers pricing from cost and markup, and converting between markup and margin.

When no price works

Percentage costs come off every sale, so they put a ceiling on margin: if they total 40%, no price can leave more than 60%, however high you set it. When the calculator says your target cannot be reached, lower the target or look for a cheaper way to take payment, sell or handle refunds. If percentage costs reach 100%, no price covers them.

Which costs belong in the price

Include every cost that comes with an order. The costs below are the ones the calculator asks for.

Product cost

What you pay for one unit. If you import stock, use landed cost, which spreads freight and duties across the units.

Shipping and packaging

Postage, packaging and any pick-and-pack fee you pay per order, minus any shipping the customer pays you. If you offer free shipping, enter the full cost.

Payment fees

A percentage of the order plus a fixed amount per transaction. The fixed amount is the same on every order, so it weighs more on low prices.

Platform or marketplace fees

A percentage of the sale that a marketplace keeps. Leave it empty if you only sell on your own store.

Refunds

The share of orders you refund in full. The calculator treats refunded revenue as lost, which is a cautious assumption.

Advertising

Ad spend divided by the orders it brought in. Leave it empty to price before ads.

Rent, salaries, software and your store plan are fixed monthly costs. They do not change with each order, so you cover them by selling enough orders, not through the price of one. The contribution margin calculator turns them into a break-even order count.

Pricing with ad costs in

If you pay for ads to win orders, their cost is part of what each order costs you. Divide ad spend by the orders it brought in and enter that as the ad cost per order. The break-even ROAS calculator shows the other side of the same question: how much ad spend a price can carry.

Rounding to a .99 price

The calculator also shows the price rounded up to the next .99. It always rounds up, so an order never leaves less than your goal. Whether .99 endings help sales is something to test in your own store; the calculator only shows what the rounding does to your profit.

In MerchantFlow

Check your prices against real order profit

MerchantFlow connects to your Shopify or WooCommerce store and your ad accounts and works out profit on each order: product cost from your COGS, payment fees, shipping and fulfilment, and ad spend from Meta, Google, TikTok and Snapchat, with refunds netted out. Your P&L then takes off your fixed costs for net profit.

See the real-time P&L

Common Questions

Product pricing: FAQ

How do you calculate the selling price of a product?

Add up the costs that stay the same whatever you charge: product cost, shipping and packaging, any fixed payment fee and ad cost per order. Then divide by what is left of the price after your percentage costs (payment, platform and refund rates) and your target margin come out: price = per-order costs / (1 - percentage costs - target margin). The calculator does this for a target margin or for a target profit per order.

How much should I sell my product for?

Enough to cover every cost of the order and leave the profit you want. Enter your real costs and your goal, and the calculator returns the lowest price that meets it. Then compare that price with what customers will pay. If the market will not pay it, the way forward is lower costs or a lower target, not a price that loses money.

What is the difference between margin and markup?

Margin is profit as a share of the selling price. Markup is profit as a share of cost, so the same sale always shows a higher markup than margin. The calculator reports net margin on the price and markup on product cost side by side. The markup calculator converts one into the other.

How do payment processing fees affect my selling price?

Most providers charge a percentage of each order plus a fixed amount per transaction. The calculator adds the percentage to your other percentage costs and the fixed amount to your per-order costs. Because the fixed amount is the same on every order, it weighs more on low prices.

Why does the calculator treat refunds as lost revenue?

It is a cautious assumption: a refunded order hands back the whole price while its costs are already spent. In practice, returned stock you can resell and fees a provider gives back reduce the loss. Lower the refund rate if you want a less cautious view.

Should I include ad costs in my price?

If you pay for ads to win orders, their cost is part of what each order costs you. Divide ad spend by the orders it brought in and enter that as the ad cost per order. If you price before ads, leave it empty and use the break-even ROAS calculator to see how much ad spend the price can carry.

What does "not reachable" mean?

Percentage costs come off every sale, so they cap the margin any price can leave: the most is 100% minus your percentage costs. A target at or above that cap cannot be met at any price. Lower the target margin or the percentages. If percentage costs alone reach 100%, no price covers them.

What is a good profit margin for my products?

There is no benchmark that holds across businesses: it depends on your category, your price point, how you win customers and your fixed costs. Use the price ladder to see what each margin needs, then check that total profit covers your fixed costs. The contribution margin calculator shows the break-even point.

Should I end my prices in .99?

The calculator shows the recommended price rounded up to the next .99 and what that does to your profit. Because it only rounds up, profit never falls below your goal. Whether .99 endings help sales is something to test in your own store.

More Tools

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Markup Calculator

Work from a cost and a markup to a selling price, and convert markup to margin

Shopify Profit Margin Calculator

Gross, contribution and net margin for one Shopify order, after Shopify's fees

Contribution Margin Calculator

Contribution margin per unit and as a ratio, with break-even units and break-even ROAS

Ecommerce Fees Calculator

Everything Shopify and your payment gateway take across a month of orders

Break-Even ROAS Calculator

The return on ad spend at which a campaign stops losing money