The Profit Goal Calculator works backward from your target profit to find either the selling price you need to charge or the maximum purchase price you can afford per unit. Use it to plan prices, assess a sales opportunity, or prepare for supplier negotiations.
This tool calculates prices at a specified sales volume, not the number of units you need to sell. Its profit calculation is sales revenue minus the purchase or production cost you enter; it does not automatically deduct overhead, fees, or taxes.
How to use the profit goal calculator
- Choose what to calculate. Select the required selling price if your purchase cost is known, or the required purchase price if your selling price is fixed.
- Enter Target Profit. This is the total dollar profit you want from all units sold, not profit per item or a percentage.
- Enter your known unit price. In selling-price mode, enter the purchase price per item. In purchase-price mode, enter the selling price per item.
- Enter Units sold. Use the number of items you expect to sell for this transaction or planning period. The quantity must be greater than zero.
- Read the result. Target selling price is the minimum price per unit needed to meet your goal. Target purchase price is the maximum cost per unit that allows you to meet it.
Keep all amounts on a consistent currency and tax basis. If you manufacture the goods, use a relevant per-unit production cost rather than only the raw material price. The accuracy of the result depends on which costs you include.
Profit goal formula and worked examples
The calculator uses this relationship:
Total profit = (Selling price per unit − Purchase price per unit) × Units sold
Rearranging this profit goal formula gives the two calculation modes below.
Calculate the required selling price
Target selling price = Purchase price per unit + (Target profit ÷ Units sold)
Suppose you expect to sell 250 items, each costing $40, and want $5,000 in total profit:
Target selling price = $40 + ($5,000 ÷ 250) = $60 per item
At $60 each, your revenue is $15,000 and your purchase cost is $10,000, leaving $5,000 before any costs not included in the calculation.
Calculate the maximum purchase price
Target purchase price = Selling price per unit − (Target profit ÷ Units sold)
Now suppose you can sell those 250 items for $65 each and still want $5,000 in profit:
Target purchase price = $65 − ($5,000 ÷ 250) = $45 per item
A $45 unit cost produces $16,250 in revenue minus $11,250 in purchase costs, meeting your $5,000 goal. Paying less than $45 increases the modeled profit; paying more reduces it below your target.
How to interpret your result
- A required selling price is a threshold, not a market recommendation. You still need to assess whether customers will pay it and whether the assumed sales volume is realistic.
- A target purchase price is a cost ceiling. Use it to evaluate supplier quotes, while also considering freight, quality, minimum order quantities, and payment terms.
- A negative purchase-price result signals an infeasible goal under the current assumptions. Even free inventory would not produce enough profit at that selling price and volume. You would need a higher selling price, more sales, or a lower target.
- Rounding can affect whether you meet the goal. If prices are limited to cents, round a required selling price up and a maximum purchase price down.
Does the result represent net profit?
Not automatically. The calculator subtracts only the unit cost you enter. Advertising, rent, transaction fees, shipping, returns, and other expenses are not separate inputs.
For a simple operating-profit plan, you can add known expenses for the same period to your desired profit before entering Target Profit, provided those expenses are not already included in the unit cost. For example, a $5,000 profit goal plus $2,000 in overhead requires $7,000 of profit above the entered purchase costs. This adjustment still does not account automatically for income taxes or costs that change with selling price.
Use the calculator for pricing and profit planning
Compare several realistic sales quantities before committing to a price. A lower volume means each sale must contribute more toward the same total profit goal. A higher volume reduces the required profit per item, but only helps if those sales are achievable.
For supplier negotiations, calculate your maximum unit cost before requesting quotes. Recalculate when a volume discount requires buying more stock: purchasing more inventory is not the same as selling more units, so do not increase Units sold unless you expect to sell them.
Related tools for checking your plan
- Use the profit calculator to check the profit produced by a proposed price, cost, and sales quantity.
- Compare profit margin with markup: margin measures profit relative to selling price, while markup measures it relative to cost.
- Find the break-even point to evaluate the sales needed to cover costs, then use the margin of safety calculator to assess how far planned sales are above that threshold.
For a subscription business, the monthly recurring revenue calculator helps track recurring revenue, which is distinct from profit.
Build a pricing calculator for your business
With Calcopolis, you can build a customized quote calculator using your own cost, quantity, and profit rules, helping website visitors estimate prices before requesting a quote.