Price Calculator

Learn how to set a pricing policy that allows your business to flourish!

Use this price from margin calculator to find the selling price needed to reach your target profit margin. You can also switch to markup mode to calculate a price by adding a percentage to your cost. These methods use different percentage bases, so the same margin and markup will not produce the same price.

How to use the selling price calculator

  1. Choose a calculation method. Under “Calculate,” select “Final price with target margin” or “Final price with target markup.”
  2. Enter your cost. Use the cost of one unit, order, or service engagement—whichever you are pricing. The calculator displays monetary values in dollars.
  3. Enter your target percentage. Enter 20 for 20%, not 0.20. The Margin or Markup field appears according to your selected method.
  4. Read the Selling Price result. This is the price required to achieve your chosen percentage relative to the cost you entered.

Keep the cost and selling price on the same basis. For example, do not enter the cost of a box of 12 items and interpret the result as the price of one item.

How to calculate price from margin

Profit margin measures the difference between selling price and cost as a percentage of the selling price. To work backward from a desired margin, use:

Selling price = Cost ÷ (1 − Target margin ÷ 100)

For example, if an item costs $100 and you want a 20% margin:

Selling price = $100 ÷ (1 − 20 ÷ 100) = $100 ÷ 0.80 = $125

The difference between price and cost is $25. Dividing $25 by the $125 selling price confirms a 20% margin.

For a positive cost, a target margin must be below 100% to produce a positive selling price. At 100%, the formula divides by zero; above 100%, it produces a negative price, not a usable pricing recommendation. A 0% margin gives a price equal to the entered cost.

How to calculate selling price from markup

Markup measures the amount added to cost as a percentage of the cost. The formula is:

Selling price = Cost × (1 + Target markup ÷ 100)

For the same $100 cost with a 20% markup:

Selling price = $100 × (1 + 20 ÷ 100) = $120

The difference between price and cost is $20, but the margin is $20 ÷ $120 × 100 = approximately 16.67%. Adding 20% to cost does not create a 20% margin.

Why margin and markup are different

Both methods describe the same difference between selling price and cost, but they divide that amount by different values:

  • Margin (%) = (Selling price − Cost) ÷ Selling price × 100
  • Markup (%) = (Selling price − Cost) ÷ Cost × 100

Consider a product that costs $50 and sells for $125. The difference is $75.

Its margin is = 0.6, or 60%, because $75 is 60% of the $125 selling price.

Its markup is = 1.5, or 150%, because $75 is 150% of the $50 cost.

Unlike margin, markup can exceed 100%. A 100% markup doubles the cost and produces a 50% margin. Choose margin when your target is a share of sales revenue; choose markup when your pricing rule is an addition to cost.

What should you include in cost?

The result is only as useful as the cost you enter. Depending on what you are pricing, relevant costs may include:

  • Purchase or production costs: inventory, materials, and direct labor.
  • Delivery and handling: inbound freight, packaging, and fulfillment costs you pay.
  • Expected losses: a reasonable allowance for damaged goods, spoilage, or returns, based on your own records.
  • Allocated overhead: an appropriate share of rent, storage, software, or administrative expenses if your pricing approach includes them.

If you enter only the cost of goods sold, the calculated margin is a gross margin—not a net profit margin. Expenses outside that cost still need to be covered. The calculator does not separately model taxes, discounts, transaction fees, or overhead; assess these before adopting the result as your final customer price.

How to apply your target selling price

  • Update prices when costs change. Recalculate using the new cost to maintain your target percentage. A fixed percentage does not guarantee stable sales volume, revenue, or total profit.
  • Check the market. The result tells you what price achieves your target mathematically, not what customers will necessarily pay. If the price is uncompetitive, review costs, the offer, or the target percentage.
  • Recheck after rounding or discounting. A lower final price reduces your achieved margin. Calculate the percentage using the price customers actually pay.
  • Consider sales volume. A profitable unit price may still leave the business unable to cover fixed costs if too few units sell.

Related pricing calculations

Build a pricing calculator for your customers

If your quotes depend on quantities, materials, or service options, use Calcopolis to build a customized pricing calculator for your website. A calculator tailored to your pricing rules can help visitors estimate costs before requesting a quote.