/ /Target Margin Pricing Calculator
Target Margin Pricing Calculator
Work backwards from the margin you want to the price you must charge. Includes platform and payment fee rates so the quoted price delivers a true net margin after every deduction.
Margin Target Inputs
All-In Unit Cost ($) COGS + shipping + packaging + per-unit ads
Target Net Margin (%)
Platform + Payment Fee Rate (%) Amazon ~15%, Shopify + Stripe ~3-5%
Margin-Based Price
All-In Unit Cost$30.00
Target Net Margin40.0%
Required Price$54.55
Fee Amount-$2.73
Profit per Unit$21.82
Markup Equivalent73%
Margin-based price: Charge $54.55 to keep a 40.0% net margin after 5.0% fees — a 73% markup on cost. Every sale at this price banks $21.82 of true profit.
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Authoritative References
Frequently Asked Questions
What is the target margin pricing formula?
Price = All-In Unit Cost / (1 - Target Net Margin - Fee Rate). With $30 cost, 40% margin, and 5% fees, price is $30 / 0.55 = $54.55. The gross-up for fees is what makes the margin real instead of theoretical.
Why include fees in margin pricing?
Fees come straight off the selling price, so ignoring a 15% marketplace fee turns a planned 30% margin into roughly 15%. Grossing up for fees protects the margin you actually keep.
What net margin should ecommerce sellers target?
Target 25-40% net margin on owned channels and 15-25% on marketplaces after all fees, ads, shipping, and returns. New products should clear at least 20% so optimization mistakes stay survivable.
How is target margin pricing different from markup pricing?
Margin pricing divides by (1 - margin) and measures profit on price; markup pricing multiplies cost by (1 + markup) and measures profit on cost. The same price can be described both ways, but margin is the standard for P and L reporting.
What if the required price is above market?
Cut all-in cost, shift to a lower-fee channel, reduce ad cost per unit, or accept a lower margin with higher volume. Never just match market price without re-checking margin — that is how sellers scale losses.