Product Pricing Calculator
Calculate your sell price from cost and markup percentage, and see profit per unit.
Results
Visualization
How It Works
Product pricing using cost-plus markup is one of the most common methods for ecommerce sellers. You add a markup percentage on top of your total unit cost (COGS plus variable costs) to arrive at a sell price that covers expenses and generates profit. Understanding the difference between markup and margin helps you price confidently and protect profitability.
The Formula
Variables
- COGS — Cost of goods sold — what you pay to manufacture or purchase the product
- Other Variable Costs — Per-unit costs like payment processing fees, packaging, or commissions
- Markup% — Percentage added on top of total cost to determine sell price
- Margin% — Profit as a percentage of sell price (always lower than markup%)
Worked Example
A product costs $25 to source (COGS) and $3 in packaging/fees. Total cost = $28. At 100% markup: Sell Price = $28 × 2.00 = $56.00. Profit = $56 − $28 = $28. Margin = $28 / $56 = 50%. Note that a 100% markup produces only a 50% margin.
Practical Tips
- A 100% markup equals a 50% margin — always verify which metric a pricing guideline is referencing before applying it.
- Factor payment processing fees (typically 2.9% + $0.30 for Stripe/PayPal) into 'other variable costs' or you'll undercount your true cost.
- For Amazon FBA sellers, referral fees (8–15%) and FBA fulfillment fees must be included in variable costs to get an accurate margin.
- Set your minimum acceptable margin first (e.g., 30%), then back-calculate the required markup: Markup% = Margin% / (1 − Margin%).
- Revisit pricing every quarter — supplier costs and shipping rates change, and a price set 12 months ago may now be unprofitable.
Frequently Asked Questions
What is the difference between markup and margin?
Markup is profit as a percentage of your cost. Margin is profit as a percentage of your selling price. Because selling price is always larger than cost, margin is always a lower percentage than markup for the same transaction. For example, a $10 profit on a $20 cost is a 50% markup, but that same $10 profit on a $30 sell price is only a 33% margin.
What markup percentage should I use for my ecommerce store?
A common benchmark is a 50% margin (100% markup), but this varies widely by category. Commodity products often operate at 20–30% margins while branded or niche products can support 60–70%+ margins. Study your competitors' pricing and your own operating costs to find a sustainable markup for your specific niche.
Should I include shipping costs in COGS?
It depends on your model. If you offer free shipping, the outbound shipping cost should absolutely be included as a variable cost per unit — many sellers forget this and destroy their margins. If you charge the customer for shipping separately, leave it out of this calculation. Inbound shipping from your supplier is typically included in COGS.
How do I price a new product when I don't know demand yet?
Start with a cost-plus approach to establish your floor price (the minimum you can charge without losing money), then research what competitors charge for similar items to find the market ceiling. Price somewhere in between, leaning higher if your product has differentiating features. You can always run promotions or adjust downward; raising prices later is harder.
What is a good profit margin for ecommerce?
Industry averages vary: grocery/consumables often run 5–20%, while apparel can reach 40–60% and software/digital products can exceed 70%. For physical goods sold on your own store, a 40–50% gross margin is considered healthy. On Amazon, 25–35% after fees is more realistic. Track net margin (after overhead) separately from gross margin.