Product Pricing Calculator
Already know what margin you want? Enter your cost and target margin, and this tool tells you exactly what to charge — no trial and error.
Product Pricing Calculator
How to use this calculator
Enter your supplier cost and any extra per-order cost you cover (like shipping), then set the profit margin you want to hit. The calculator solves backwards to tell you the exact price that delivers that margin — along with a "charm price" suggestion rounded to the nearest .99, since that's how most of these prices end up displayed at checkout anyway.
The formula: solving for price
This is the mirror image of a normal margin calculation. Instead of already knowing the price and solving for margin, you know the margin you want and solve for price:
Notice this is division, not "cost + 35%." Adding 35% of the cost on top ($12.50 + $4.38 = $16.88) actually only produces a 26% margin, not 35% — because that flat addition is a markup, and margin and markup are measured against different bases. Dividing by (1 − margin) is what correctly reverse-engineers the price for the margin percentage you actually want.
Worked example
You're sourcing a kitchen gadget for $9.00, and shipping (which you absorb) adds $3.50, for a total cost of $12.50. You want a 35% margin to leave room for ad testing.
| Metric | Value |
|---|---|
| Total cost | $12.50 |
| Target margin | 35% |
| Price to charge | $19.23 |
| Profit per order | $6.73 |
| Charm price | $19.99 |
Rounding up to $19.99 instead of the exact $19.23 actually pushes your real margin slightly above 35% — a small, common, and usually harmless bit of extra cushion.
Frequently asked questions
How is the selling price actually calculated? +
The calculator divides your total cost by (1 minus your target margin, expressed as a decimal). This is the standard reverse-margin formula: it is deliberately not "cost plus a flat markup," because a flat markup on cost does not produce the margin percentage you actually asked for. Dividing, rather than multiplying by (1 + markup), is what guarantees the resulting price hits your target margin exactly.
Why can't I just multiply my cost by a fixed number, like 3x? +
A flat multiplier (like "always charge 3x cost") is simple, but it doesn't protect a consistent margin percentage when your costs vary between products, and it easily confuses markup with margin. Cost x 3 is a 200% markup, but only a 66.7% margin — those are very different economics, and the label "3x" hides which one you're actually getting. Setting a target margin percentage first, then solving for price, keeps your profitability consistent across an entire catalog of products with different costs.
Should I round the result to a "psychological" price like $19.99? +
Usually yes, for consumer-facing prices — charm pricing ($19.99 instead of $20.14) is a well-documented pattern in retail and rarely costs you meaningfully in perceived value. Just check the calculator again with your rounded price to confirm the margin you end up with is still acceptable; rounding down slightly reduces your margin, rounding up slightly increases it.
What margin should I target for a new, untested product? +
Many dropshippers target 30-40% when a product is new and unproven, because that cushion absorbs early ad testing costs, return-to-origin losses, and the trial-and-error of finding a winning ad creative. Once a product is proven and ad costs stabilise, some sellers deliberately lower the margin slightly to stay competitive on price, relying on volume instead.
Does this include payment processing fees or ad costs in the price? +
No — this calculator solves for the price needed to hit a margin on product cost alone. Payment gateways typically take an additional 2-5% plus a small fixed fee per transaction, which effectively lowers your realised margin below the number shown here. Check the Payment Fee Calculator to see that impact, and consider building a couple of percentage points of buffer into your target margin to absorb it.