The Required Selling Price Calculator—the most direct tool for professional pricing.
Instead of guessing what markup to apply, this calculator uses your desired Gross Margin percentage and the Cost of your product to instantly determine the lowest price you must charge to meet your profitability targets. This tool is essential for businesses that must hit specific margin goals to cover overhead, secure loans, or satisfy investors. Stop pricing blind and start selling smart.
Required Selling Price Calculator
Calculate the price needed to achieve your desired Gross Margin.
Results:
Required Selling Price ($): 0.00
Short Instructions
To use the calculator, simply provide two key inputs:
- Product Cost ($): The total direct cost (Cost of Goods Sold or COGS) to acquire or manufacture the product or service.
- Desired Gross Margin (%): The percentage of the final selling price you wish to keep as gross profit (e.g., enter 40 for a 40% margin).
Click ‘Calculate Required Price’ to receive the minimum Selling Price you must set to achieve your financial goal.
How This is Helpful for Business
Accurate price setting is the most critical factor in achieving profitability. This calculator helps businesses in several ways:
- Goal-Oriented Pricing: It ensures your prices are determined by your profit goals first, rather than relying on arbitrary markup rules or competitor prices.
- Preventing Underpricing: It eliminates the risk of accidentally setting a price that looks profitable on paper but fails to yield the necessary margin to cover operating expenses.
- Negotiation Benchmark: It provides a firm, data-driven floor price. You know exactly how low you can go when negotiating bulk orders or offering discounts without jeopardizing your target margins.
- Scaling and Planning: Knowing the required price for a desired margin helps in calculating future revenue expectations and planning capital needs.
What Actually This is Based On
This calculator is based on a rearrangement of the standard Gross Margin formula. It effectively calculates the price required so that your Cost equals the remaining percentage of your revenue after the desired Margin is subtracted.
The core relationship is:
Since we define profit by the Margin percentage, the calculation simplifies to:
For example, if the cost is $\$ 60$ and the desired margin is $40\%$ (or $0.40$ as a decimal):
