💰 How to Price Your Product for Profit
Trying to figure out what price to sell your product for? Whether you’re selling handmade crafts, digital downloads, or physical products, getting your pricing right is key to making a profit.
This article walks you through how to calculate your selling price, gives you a simple formula, and provides a calculator and infographic to make things super easy.
Table of Contents
Enter the Product cost and the desired profit margin. The Calculator will give you the selling price.
⚙️ Sell Price Calculator
Powered by OneSDR.com
🙋♀️ What Is a Selling Price?
Your selling price is the amount you charge customers for your product or service. It needs to cover your costs and include profit so your business can grow.
🧾 What Goes Into a Selling Price?
Here are the main elements:
1. Cost of Goods Sold (COGS)
This includes all materials, labor, packaging, shipping, etc. Example: If you make a candle, COGS includes wax, wick, jar, label, and shipping supplies
2. Desired Profit Margin (%)
How much profit do you want to make? A 30% margin means you keep 30 cents for every $1 in sales (after covering costs)
3. Additional Costs (Optional)
This includes things like marketplace fees, transaction fees, or marketing costs if you’d like to factor them in
🧮 Selling Price Formula
Here’s the simple formula used by many small businesses and online shops:
Selling Price = Cost ÷ (1 - Profit Margin)So if your total cost is $20 and you want a 30% margin:
Selling Price = 20 ÷ (1 - 0.30) = 20 ÷ 0.70 = $28.57You’d need to sell your product for at least $28.57 to hit your target margin
🎯 Why Use a Sell Price Calculator?
- Avoid underpricing your product
- Hit your profit goals consistently
- Stay competitive while covering your costs
- Great for Etsy sellers, Shopify stores, and local businesses
📊 Example Breakdown
Let’s say:
- Product cost: $18
- Desired profit margin: 40%
Selling Price = 18 ÷ (1 - 0.40) = 18 ÷ 0.60 = $30You’d need to charge $30 to make a 40% profit
🛍️ Common Industry Profit Margin Benchmarks
| Product / Industry | Typical Profit Margin (%) | Notes |
|---|---|---|
| Jewelry & Luxury Goods | 60% – 80% | Markups can be 100–300%, but margin is a share of revenue, not cost |
| Clothing & Fashion Apparel | 50% – 60% | High-margin business, driven by branding |
| Handmade Crafts & Art | 40% – 50% | Depends on uniqueness and low overhead |
| Beauty & Skincare | 60% – 70% | Low production cost, high brand value |
| Footwear | 40% – 55% | Similar to apparel, varies with brand recognition |
| Digital Products | 85% – 95% | Tiny delivery costs after development |
| Consumer Electronics | 10% – 20% | Competitive industry, relies on accessories and upselling |
| Toys & Games | 30% – 45% | Better margins on specialty or branded items |
| Books / eBooks / Courses | 70% – 90% | Especially high for digital versions |
| Food & Beverage (retail) | 20% – 35% | Perishables + packaging = moderate margins |
| Furniture | 30% – 50% | High shipping cost but room for markup |
| Home Decor / Kitchenware | 40% – 60% | Design-driven or seasonal markup margin |
| Pet Products | 40% – 60% | Loyal market and consistent demand |
| Sporting Goods | 30% – 50% | Often seasonal but strong brand pricing power |
| Subscription Boxes | 35% – 50% | Includes discounts, bundling, and fulfillment |
| Wholesale / Resale | 20% – 40% | Lower margin, higher volume |
| SaaS (Software as a Service) | 75% – 90% | Recurring revenue, low delivery cost |
| Automotive Accessories | 25% – 45% | Branded aftermarket items have stronger margins |
📌 Tips for Setting the Right Price
- Know your customer – What are they willing to pay?
- Research competitors – Check price ranges on Etsy, Amazon, Shopify
- Factor in fees – Account for transaction or platform fees (like Etsy, PayPal, Stripe)
- Don’t race to the bottom – Pricing too low can hurt your brand image
- Test and adjust – Start with one price and adjust based on performance and feedback