How to price a product for real profit
Most makers price by guessing a number that 'feels right' — and quietly lose money once fees and overhead are counted. Here's how to price backwards from the margin you actually want to keep.
Skip the math — the free product pricing calculator runs this from your own figures.
Open the free calculator →Count every cost, not just materials
Your true cost per unit is more than the materials. It's materials plus your own labor plus a share of your monthly overhead — tools, subscriptions, rent, software — spread across the units you sell.
Leaving out labor and overhead is the classic mistake: it makes a product look profitable when it isn't.
Remember the platform takes a cut
If you sell on a marketplace or take card payments, a slice of every sale disappears in fees before you see it. A price that looks like it clears your margin can fall short once 3–15% comes off the top.
Price so the margin survives the fees, not before them.
Work backwards from your target margin
Instead of adding a markup and hoping, decide the profit margin you want to keep, then solve for the price that delivers it after costs and fees.
The formula: price = total cost ÷ (1 − fee% − target margin%). If your fees plus target margin add up to less than 100%, this always returns a price that clears the margin you set.
Sanity-check against the market
Your formula tells you the floor — the price below which you lose money. The market tells you the ceiling. If your profitable price is above what customers will pay, the fix is usually lower cost or a higher-value product, not a lower margin.
The free calculator below does the backwards math instantly, so you can see your profitable price and per-unit profit as you change any input.
Questions
What margin should I aim for?
It varies by product, but many small physical-goods sellers target 40–60% gross margin to leave room for fees, discounts, and returns. Digital products can go much higher. Set the target deliberately rather than discovering it by accident.
Should I price the same everywhere I sell?
Not necessarily. If one channel charges higher fees, your break-even price there is higher — so either raise the price on that channel or account for the fee difference in your margin.