SMB Tools / Pricing

What does a price have to cover?

See the price a target margin implies, what a markup does, or the margin a price gives you, with the difference between markup and margin made clear. An estimate from your numbers, not a pricing recommendation.

What one unit costs you

Unit cost
$
Fees, discounts and returns
%

What the price has to carry

Units you can sell per month
/ mo

Fixed costs per month
$
Pay you need per month
$

Set the price

Target gross margin
%

Same thing, the other way100.0% markup
Covers the bills, not you-$3,000

This price clears the overhead but leaves $2,000 for you, short of the $5,000 you need. At 400 units, a price of $48.97 would pay you in full; at this price it takes 550 units a month.

Price at the target margin
$41.24
$20.00 per unit after cost and fees · 48.5% margin
Revenue, 400 units
$16,495
After unit cost and fees
$8,000
After $6,000 fixed costs
$2,000
After your $5,000 pay
-$3,000
The prices that matter at 400 units a month
PricePer unitMarginLeft after your pay
$36.08Floor: covers cost and overhead, pays you nothing$15.0042%-$5,000
$48.97Pays you $5,000 in full$27.5056%$0
$41.24Your target$20.0049%-$3,000
Raise it or discount it?
If youPriceUnitsLeft after your pay
Keep it as is$41.24400-$3,000
Raise 10%, lose 10% of customers$45.36360-$2,360
Raise 10%, lose 20% of customers$45.36320-$3,320
Cut 10%, win 10% more customers$37.11440-$3,960
Cut 10%, win 25% more customers$37.11500-$3,000

With 49% of the price as margin, a raise survives losing customers: a 10% raise still beats today unless it costs more than 17% of them. A discount has to win far more sales than it gives up.

An estimate from the numbers you entered, not a pricing recommendation. The floor is the price at which costs are covered and the pay-you price the one at which your pay is covered too; customers decide what a price is worth, and what volume does at a price is the only answer that counts.