Pricing & growth · Per product or service
Pricing & profit
Build a price around direct costs, overhead, payment fees and your target margin.
Example amounts. Replace with your numbers.
Build your price
Include materials and delivery labor. For your own time, include the compensation you want to cover.
Costs not already included in the direct cost.
Margin is profit divided by selling price, not a markup on cost.
Percentage of the selling price. Include fixed per-sale fees in direct cost.
Price to meet your target margin
$141.79Before sales tax. A pricing starting point, not a guarantee of sales.
- Direct cost
- $65.00
- Allocated overhead per sale
- $30.00
- Payment / selling fees
- $4.25
- Profit per sale
- $42.54
- Monthly profit at expected volume
- $4,254
- Markup on cost
- 49.3%
A 30% margin is different from adding 30% to your cost.
How this estimate works
Price = (direct cost + monthly overhead ÷ monthly volume) ÷ (1 − margin − percentage fees). The overhead allocation depends on reaching your planned volume. Sales tax, income tax and financing are excluded. If a fee also applies to sales tax, model that additional cost separately.