Pricing Calculator
Calculate selling price based on cost and desired profit margin or markup
Pricing Details
How Selling Price is Calculated?
Pricing is one of the most critical business decisions. The right selling price must cover all costs (materials, labor, overhead) and provide a desired profit margin. Our calculator helps you determine the optimal selling price based on cost and markup or profit margin.
Pricing Formula/Equation
Using Markup: Selling Price = Cost × (1 + Markup %)
Using Margin: Selling Price = Cost / (1 - Profit Margin %)
Profit = Selling Price - Cost
Where:
- Cost = Total cost to produce or acquire the product/service
- Markup % = Percentage added to cost (Markup = (Selling Price - Cost) / Cost × 100%)
- Profit Margin % = Percentage of profit in selling price (Margin = (Selling Price - Cost) / Selling Price × 100%)
- Selling Price = Final price charged to customers
Example:
Let's calculate the selling price for a product with cost of ₹500 and a desired profit margin of 30%.
Given: Cost = ₹500, Profit Margin = 30%
Step 1: Calculate Selling Price
Selling Price = Cost / (1 - Profit Margin %)
Selling Price = ₹500 / (1 - 0.30)
Selling Price = ₹500 / 0.70
Selling Price = ₹714.29
Step 2: Calculate Profit
Profit = Selling Price - Cost
Profit = ₹714.29 - ₹500
Profit = ₹214.29
Step 3: Verify Profit Margin
Profit Margin = (Profit / Selling Price) × 100%
Profit Margin = (₹214.29 / ₹714.29) × 100%
Profit Margin = 30% ✓
Result: To achieve a 30% profit margin, you should sell the product for ₹714.29, generating a profit of ₹214.29 per unit.
Use Cases for Pricing Calculator
Product Pricing
Set optimal prices for products based on costs and desired margins
Service Pricing
Determine hourly rates or project prices for services
Markup Calculation
Calculate markup percentages for retail or wholesale pricing
Profit Planning
Plan prices to achieve target profit margins
Benefits of Using Our Pricing Calculator
Calculate prices using markup or profit margin
Ensure prices cover all costs and desired profit
Make informed pricing decisions
Understand the difference between markup and margin
100% free, no registration required
Mobile-friendly design
Pricing Calculator FAQs
❓How do I calculate the right selling price?
Selling price = Cost + (Cost × Markup %). Alternatively, if you know desired profit margin: Selling Price = Cost / (1 - Profit Margin %). Consider all costs (materials, labor, overhead) and desired profit margin when pricing.
❓What is markup vs margin?
Markup is the percentage added to cost to get selling price: Markup = (Selling Price - Cost) / Cost × 100%. Margin is the percentage of profit in selling price: Margin = (Selling Price - Cost) / Selling Price × 100%. Markup is always higher than margin for the same profit amount.
❓What markup percentage should I use?
Markup percentage varies by industry and business model. Retail typically uses 50-100% markup, restaurants 60-300%, services 50-200%, and manufacturing 20-50%. Consider your costs, competition, market demand, and desired profit when setting markup.
❓How do I account for overhead costs in pricing?
Include overhead costs (rent, utilities, salaries, marketing) in your total cost calculation. You can allocate overhead as a percentage of direct costs or add it as a separate line item. Ensure your selling price covers all costs plus desired profit.
❓Is this pricing calculator free to use?
Yes, this pricing calculator is completely free to use with no registration required.