How do I calculate the price of a product?

Add up materials, labor (hours × hourly rate), packaging, and a fair share of overhead. Divide that total cost by (1 minus your desired profit margin as a decimal). For a 30% margin: $20 cost ÷ (1 - 0.30) = $28.57 retail.

What is a good profit margin for a small business?

20–40% is common for retail products. Handmade and luxury goods often target 50%+. Less than 20% leaves little room for discounts, returns, or growth.

Should I include my time as a cost?

Yes. Always pay yourself an hourly wage and treat it as a real cost — otherwise you're subsidizing the business with free labor and your prices will be too low.

What is the difference between margin and markup?

Margin = profit ÷ price. Markup = profit ÷ cost. A 50% markup is only a 33% margin. They are not the same number.

Product Pricing Calculator

For makers, small product businesses, and resellers. Enter your costs and target margin — we'll give you a fair retail and wholesale price.

Quick answerTo price a product, add your total costs (materials, labor, packaging, overhead) and divide by (1 minus your profit margin as a decimal). Example: $20 in costs ÷ (1 − 0.30) = $28.57 retail at a 30% margin.

Your numbers

Edit any field — results update as you type.

Materials cost per unit

Labor hours per unit

hrs

Your hourly rate

Packaging cost

Overhead per unit

Desired profit margin

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Suggested retail price

$56.15

$19.65 profit per sale at a 35.0% margin.

Total cost

$36.50

Wholesale price

$28.08

Markup

54%

Where the price goes

Each bar shows how much of the retail price covers each cost — the rest is profit.

Materials

$8.00

Labor

$25.00

Packaging

$1.50

Overhead

$2.00

Profit

$19.65

Your margin is in a healthy range for most retail products.

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How this calculator works

Retail price = total cost ÷ (1 − margin). Total cost adds materials, labor, packaging, and overhead. Wholesale defaults to 50% of retail, the standard for buy-back from stockists. Markup is profit divided by cost, not by price — that's why a 50% markup is only a 33% margin.

Tips for product pricing

Always pay yourself for your time. Free labor is the #1 reason small businesses fail to grow.
Track real overhead for a month — most makers underestimate it by 2–3×.
Set wholesale at 50% of retail so stockists can mark up to your retail price without undercutting you.
Re-price every 6 months. Materials, shipping, and your skill all change.