How to Use the Sales Price Calculator
- Enter the product cost - This is the amount you paid for the product or the cost to produce it.
- Set your desired profit margin - This is the percentage profit you want to achieve on each sale. For example, entering 20 means you want to make 20% profit.
- Click the Calculate button to see your recommended selling price.
Understanding Profit Margin
Profit margin is calculated as:
Profit Margin = (Selling Price - Cost) ÷ Cost × 100%
This calculator uses the formula: Selling Price = Cost × (1 + Profit Margin ÷ 100)
Practical Examples
- Example 1: If you buy a product for $50 and want a 25% profit margin, your selling price should be $62.50 ($50 × (1 + 0.25))
- Example 2: If you have a $1000 product and want to make $150 profit, your selling price should be $1150 ($1000 + $150)
Tips for Pricing
- Consider your business goals - Do you want to maximize volume with lower margins or focus on higher margins?
- Check competitor pricing to ensure your price is competitive
- Factor in other costs like marketing, shipping, and overhead when setting your price