Target Profit Margin Price Calculator
Set the selling price that hits your target net profit margin after cost and per-unit operating expenses.
How it works
Total cost = product cost + operating cost · Price = total cost ÷ (1 − target margin%)
Because margin is measured against the selling price, you reach a target margin by dividing total cost by (1 − margin), not by multiplying by (1 + margin) — that common shortcut produces a markup and always falls short of the intended margin. Folding per-unit operating costs into the base means the resulting margin holds after shipping and fees, not just against the wholesale cost.
Worked example
A $40 product with $8 of per-unit operating cost has a $48 total cost. For a 25% margin, price it at 48 ÷ (1 − 0.25) = $64, leaving $16 of profit. That $16 on a $48 base is a 33.3% markup — same sale, different base.
Frequently asked questions
Why divide by (1 − margin) instead of multiplying?
Margin is a share of the final price, so the cost represents (1 − margin) of the price. Dividing recovers the full price. Multiplying cost by (1 + margin) instead computes a markup, which lands below your target margin.
Should operating costs be in the price?
If you want the margin to survive shipping, transaction fees and packaging, yes — include a realistic per-unit allocation. Otherwise the "margin" only holds before those costs and your real profit is thinner.
What is a healthy target margin?
It depends entirely on your industry and cost structure. Compare against typical net margins for your sector rather than a universal figure, and make sure the resulting price is competitive.
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Educational estimate, not financial advice.