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Target Profit Pricing Calculator
Set your selling price from a target profit goal instead of guessing. Enter fixed costs, variable unit cost, and expected volume to find the exact price that delivers your profit target.
Target Profit Inputs
Variable Cost per Unit ($)
Total Fixed Costs ($)
Target Profit ($)
Expected Units Sold
Required Price
Variable Cost / Unit$22.00
Fixed + Target / Unit$10.00
Required Selling Price$32.00
Revenue at Volume$96000.00
Verified Profit$18000.00
Implied Net Margin18.8%
Target price: Charge $32.00 per unit at 3000 units to cover $12000.00 fixed costs and deliver $18000.00 profit — a 18.8% net margin. If volume falls short, raise price or cut fixed costs to hold the target.
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Authoritative References
Frequently Asked Questions
What is target profit pricing?
Target profit pricing sets price as (Total Variable Cost + Fixed Costs + Target Profit) / Expected Units. It guarantees the profit goal if the volume forecast holds, making it ideal for made-to-order, wholesale bids, and seasonal buys.
How does target profit pricing differ from cost-plus?
Cost-plus adds a fixed markup to unit cost and ignores volume. Target profit pricing spreads fixed costs and the profit goal across expected units, so price responds to scale — higher volume means a lower required price.
What if actual volume misses the forecast?
Recompute with the lower volume: the required price rises because fixed costs spread thinner. Build a sensitivity table at 70%, 100%, and 130% of forecast volume before committing to a price.
When should ecommerce sellers use target profit pricing?
Use it for wholesale quotes, crowdfunding goals, first production runs, and subscription boxes where volume is plannable. For always-on retail, pair it with margin pricing so fees and ad spend stay covered.
How do fees change the target price?
Add per-unit fees (marketplace + payment + shipping) to variable cost before solving. For percentage fees on price, gross up: Price = (Variable Cost + Allocation) / (1 - Fee Rate).