Cost price calculator

How to use

This calculator works the price formula backwards. Instead of starting from the cost and arriving at a price, it starts from the price the market already accepts and shows how much you can afford to pay for the product without giving up the margin you set. It is the calculation for anyone negotiating with a supplier or deciding whether a new cost still fits the price being charged.

• Set a buying ceiling for a product that already has a market price.
• Negotiate with a supplier knowing how far you can go without losing margin.
• Check whether your card or platform fee still fits inside the price you charge.

1. Enter the sale price you charge today.
2. Enter the lowest acceptable margin, as a percentage of the price — not of the cost.
3. If the sale goes through a card or a platform, enter the percentage fee and the fixed fee.
4. The result shows the maximum cost, the expected profit, the total fees and the effective margin.

Formula

Maximum cost = price × (1 − margin − fees) − fixed fee

Example

A price of 100 with a 40% margin and no fees allows a maximum cost of 60. With a 10% fee and a fixed fee of 2 it drops to 48 — the same profit of 40 on the sale.

Limitations

• Margin plus fees must add up to less than 100%; above that no cost makes the sale work.
• The figure is a ceiling for the product cost and does not include fixed expenses such as rent or payroll.
• A cost that changes over time must be recalculated whenever the price or the fee changes.

Frequently asked questions