Target Price Optimization

Selling Price Calculator

Calculate your recommended retail selling price using target margin %, target markup %, or desired dollar profit goals.

$
Recommended Price$71.43
Dollar Profit$21.43
Resulting Margin / Markup30.00% Margin | 42.86% Markup
Quick Answer: How do you calculate selling price from cost and target margin?

To calculate selling price from cost and target margin percentage, divide the unit product cost by (1 minus your target margin percentage expressed as a decimal). For example, a $10 item with a 40% target margin requires a selling price of $10 / (1 - 0.40) = $16.67.

What the Selling Price Calculator Does

The Selling Price Calculator helps you determine the exact retail selling price needed to meet your business profit goals. You can set prices using three distinct strategies: Target Margin Percentage, Target Markup Percentage, or Desired Dollar Profit.

Who Should Use This Tool

Ideal for store owners launching new SKUs, retail buyers setting MSRP, and wholesale manufacturers pricing distributor lines.

3 Pricing Calculation Methods

1. Target Margin Method:

Selling Price = Cost / (1 - (Target Margin % / 100))

2. Target Markup Method:

Selling Price = Cost × (1 + (Target Markup % / 100))

3. Desired Dollar Profit Method:

Selling Price = Cost + Desired Dollar Profit

Worked Example: Specialty Coffee Roaster

A specialty coffee roaster packages single-origin coffee bags with a total landed cost of $11.20 (green beans, roasting labor, valve bag, and nitrogen flushing). The roaster aims for a 45% gross margin.

Total Landed COGS per Bag:$11.20
Target Gross Profit Margin:45.0%
Formula Calculation:$11.20 / (1 - 0.45) = $11.20 / 0.55
Calculated Recommended Retail Price:$20.36 Price ($9.16 Profit)

Common Retail Pricing Mistakes

Multiplying Cost by (1 + Margin): To achieve a 45% margin on an $11.20 cost, multiplying $11.20 × 1.45 gives $16.24, which only yields a 31% margin. You must divide by (1 - 0.45).

Frequently Asked Questions

How do I calculate selling price from cost and target margin?

Selling Price = Cost / (1 - (Target Margin % / 100)).

Last Updated: July 2026

Financial Disclaimer: MerchSites tools and guides provide estimates for product pricing, margin analysis, and expense planning. All calculations are performed locally in your web browser. Content is for educational purposes and does not constitute formal tax, legal, or accounting advice.