- Enter unit cost. Include the landed product cost attributable to one item.
- Set the target margin. Choose the desired gross profit as a percentage of selling price.
- Add per-sale fees. Include marketplace, payment, packaging, or other unit-level charges.
- Review the price and profit. Compare the estimate with market constraints before finalizing the price.
Retail Price Estimator
The Retail Price Estimator calculates a suggested selling price from unit cost, desired gross margin, and optional per-sale fees. Unlike a simple markup calculation, a margin-based price works backward from the share of revenue you want to retain after product cost and fees.
Merchants can use the estimate when launching a product, reviewing supplier cost changes, or checking whether a marketplace fee makes the current price unsustainable. The output includes the estimated price, gross profit per unit, and the equivalent markup on cost. It does not automatically account for demand, competitor positioning, taxes, or psychological pricing, so the final shelf price may need commercial adjustment.
Calculator inputs
USD
%
USD
Result
—
Calculated result
Gross profit per unit—
Equivalent markup—
Cost plus fees—
Estimated price = (Unit cost + Per-sale fees) ÷ (1 − Target margin)
Gross profit per unit = Estimated price − Unit cost − Per-sale fees
Equivalent markup = Gross profit ÷ (Unit cost + fees)
Enter the target margin as a percentage of selling price, not as a markup on cost.
What the result means
The estimated price is the minimum price that produces the selected gross margin under the entered cost assumptions.
Shipping, returns, discounts, and payment charges should be included in fees when they are expected on each sale.
Given: unit cost $24, fees $3, and target margin 40%.
Calculation: Total unit cost = $27. Estimated price = $27 ÷ (1 − 0.40) = $45. Gross profit = $45 − $27 = $18.
Result: A price of $45 produces a 40% gross margin and an equivalent 66.67% markup on total unit cost.
Is margin the same as markup?
No. Margin divides profit by selling price, while markup divides profit by cost.
Should freight be included in unit cost?
Include inbound freight when it is part of the landed cost of obtaining the product.
Can I enter a 100% target margin?
No. A 100% gross margin would require zero cost or an undefined price in this model.
How should I account for discounts?
Use the expected net selling price or increase the list price enough that the average discounted price still meets the target.
Does the estimate include taxes?
It excludes taxes collected from the customer unless those taxes are a true business cost.