How to calculate the selling price of a product
The right selling price isn't your cost plus a number you like the look of - it's the price that still leaves your target profit after every per-sale cost has been paid. The formula this calculator uses is:
Selling price = (Total costs + Fixed payment fee) / (1 - Payment fee % - Target margin %)
That denominator matters. Payment processing fees are charged as a percentage of the final price, so the fee changes as the price changes - a circular problem most pricing formulas simply ignore. The common shortcut, selling price = cost x (1 + margin), isn't actually a margin formula at all (it's markup), and it leaves processing fees out entirely. This calculator solves for the price algebraically, so the result genuinely delivers the margin you asked for.
A worked example using the defaults: your product costs $40, shipping is $8, you spend $15 on ads per sale, and your processor charges 2.9% + 30 cents. To keep a 30% net margin, you need to charge $94.34 - which returns $28.30 of profit on each sale after all costs, including the $3.04 processing fee at that price.
Margin vs. markup - and why confusing them costs you money
This is the most expensive mix-up in ecommerce pricing. Margin is profit as a percentage of the selling price. Markup is profit as a percentage of your costs. They sound interchangeable; they aren't.
If your costs are $70 and you apply a 30% markup, you charge $91 and make $21 - which is only a 23% margin. Price a whole catalogue this way while believing you're earning 30%, and you're leaving seven points of margin on the table on every order, or worse, undercutting your own profitability targets without knowing it.
This calculator supports both, clearly labelled, so you can price the way you think - just know which one you're using. If a supplier or competitor quotes you a percentage, it's worth asking which they mean.
What to include in your costs before setting a price
A selling price is only as good as the cost figure underneath it. Beyond your product cost (COGS), include shipping and packaging, your advertising cost per sale (total ad spend divided by orders - even rough is better than zero), payment processing fees, and any per-order extras: marketplace fees, pick and pack, a returns allowance. The calculator applies your store-wide costs to every product you save, so you can price an entire catalogue against one consistent cost base - and reprice it instantly when, say, your CPA goes up.
Don't forget psychological pricing
Once you have the mathematically correct price, round it deliberately. Nobody charges $94.34 - but $94.99 or $99.00 changes your margin, so it's worth knowing by how much. Use the calculator result as the exact baseline, then choose the final price on your store deliberately.
