Product Pricing Calculator
Enter what one order actually costs you and the margin you want to keep, and get the selling price that gets you there. Percentage costs like payment fees are handled properly, so the number you see is the number that holds.
Your numbers
Optional — leave the ad cost empty if you are not paying for traffic yet.
Results
At this price you hit your target margin, with every fixed cost and every percentage cost already covered.
The pricing formula
Selling price = (Product cost + Shipping + Ad cost) ÷ (1 − (Fee % + Target margin %) ÷ 100)
The top of the fraction is everything that costs you a fixed amount per order: what the supplier charges, what shipping costs, and what you pay in ads to win that order. Those numbers do not change when you raise your price. The bottom of the fraction is the share of the price that is actually left for you after the costs that are defined as a percentage of the price itself — payment processing, marketplace commission, and the margin you want to keep.
That division is the whole point. If fees and your target margin together take 35% of the price, only 65% of whatever you charge is available to pay for the product, the shipping and the ads. So you divide your fixed costs by 0.65 instead of just adding a markup on top. Skip the division and you will land short every single time, and the gap grows with every percentage point of fees you forgot to account for.
How to use this calculator
- 1
Enter your landed product cost and the shipping you pay per order — the real supplier invoice, not the sticker price on the listing.
- 2
Add your payment and platform fee as a percentage of the selling price. Look it up in your payment provider's dashboard for your own country and plan rather than guessing.
- 3
Set the target margin you want to keep, add your ad cost per order if you run paid traffic, and read the recommended price and the profit it leaves you.
Why cost-plus pricing quietly kills stores
The most common way beginners price a product is to take the cost and multiply it — three times cost, five times cost, whatever the rule of thumb of the week says. It feels safe because the multiplier is big. The problem is that this method only covers the costs you can see. Payment fees, platform commission and the margin you were counting on are all percentages of the selling price, and percentages grow as the price grows. A fixed markup on cost cannot chase a moving target.
Then there is the markup-versus-margin confusion, which is the single most expensive arithmetic mistake in ecommerce. Markup is measured against your cost. Margin is measured against your selling price. They are not the same number and they are never close. If you buy at 10 and sell at 20, that is a 100% markup but only a 50% margin. Sell the same product at 15 and your markup is 50% while your margin is 33%. Sellers who think a 50% markup means a 50% margin are running on roughly a third less profit than they believe, and they usually discover it when a refund or an ad price increase pushes them under.
Working backwards from the margin fixes both problems at once. You decide what share of each sale you want to keep, you tell the calculator what percentage the fees take, and the price falls out of the maths instead of out of a habit. It also makes your break-even visible, which is what you actually need when you start scaling ads: at a 40% margin your break-even ROAS is 2.5, and no amount of optimism about creatives changes that number.
When the required price feels too high for the market
Sooner or later the calculator returns a price that your market will clearly not pay. That is useful information, not a failure. It means the product, at your current cost structure and your current ad efficiency, does not support the margin you asked for. The wrong response is to shave the price down and hope volume fixes it. The right response is to work on one of the four levers that actually move the number.
Lever one is sourcing: a better supplier price, a cheaper shipping line, or lighter packaging drops the top of the fraction directly. Lever two is order value — bundles, multi-packs and a genuinely useful upsell spread the same shipping and the same ad cost across a bigger sale, which raises margin without raising the price of a single unit. Lever three is ad cost: creatives and offer angles usually have far more room in them than the product cost does, and cutting your cost per order is mathematically identical to finding a cheaper supplier.
Lever four is accepting a thinner margin — but knowingly. There are real reasons to run lean: a product people buy again, a strong email list, a bundle that lifts average order value on the back end. What kills stores is running lean by accident, because the price was set by feel and the fees were never in the model. Decide the margin on purpose, write it down, and check the real number against it every month. If you are also researching products or tracking competitor shops, Droplink's other free calculators for profit margin and break-even ROAS use the same inputs, so the picture stays consistent.
Frequently asked questions
What is the difference between markup and margin?
Markup compares your profit to your cost; margin compares it to your selling price. Buy at 10 and sell at 25 and you have a 150% markup but a 60% margin. Because the denominator is different, markup is always the larger and more flattering number. Price against margin, since margin is what tells you how much of each sale you actually keep.
Should advertising cost be part of the price calculation?
If paid traffic is what brings the order in, yes. Ad spend behaves exactly like a fixed cost per order, so leaving it out gives you a price that looks profitable in a spreadsheet and loses money in the ad account. Use your real average cost per purchase over a meaningful period, not your best day. If your sales come from organic content, an existing list or repeat customers, you can leave the field empty and read the result as the price before acquisition cost.
What target margin should I choose?
There is no universal number, and anyone quoting one is guessing about your business. The honest answer depends on three things: how dependent you are on paid ads, how often you get returns or chargebacks, and whether customers come back. A store that buys every order from an ad platform and sells a one-time product needs a much fatter margin than one with organic traffic and repeat purchases. Pick a number you can defend, then check it against your real profit per order after a month of data.
Should I use .99 price endings?
Charm pricing is a long-standing retail convention and it does no harm for low- and mid-priced impulse products, where a price that looks like a deal fits the context. For premium positioning, round numbers tend to read as more confident and less discount-driven. It is a rounding decision, not a strategy: set the price from the margin first, then round to whatever ending suits your brand — and only round up, so the rounding never eats into the margin you calculated.