How the calculation works
Selling price = Product cost ÷ (1 − Target margin decimal)
Worked example
With a $60 cost and 40% target margin, estimated selling price is $60 ÷ 0.60 = $100.
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Estimated selling price
$100
Estimated profit per sale
$40
Frequently asked questions
Why is selling price not simply cost plus margin percent?
Adding 40% to cost creates a 40% markup, not a 40% margin. Margin is measured against the final selling price.
Should I include shipping and payment fees in cost?
Include any variable costs you want the target margin to cover. Taxes and marketplace rules may require separate treatment.
Can target margin be 100%?
No. The formula becomes undefined at 100% because no finite selling price can leave the entire selling price as profit while cost is above zero.
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