Retail Price Calculator
Set a retail price from cost, target margin, overheads and expected discounting.
What the Retail Price Calculator does
Retail pricing works backwards from the margin you need, then grosses up for expected discounting. Businesses that promote heavily must build that into the list price, or every sale quietly erodes the intended margin.
Formula
Total cost = Product cost + Overhead per unitNet price needed = Total cost ÷ (1 − Target margin)List price = Net price needed ÷ (1 − Expected discount)
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Product cost | selected currency | Yes | Accepts more than 0. |
| Target gross margin | % | Yes | — |
| Overhead per unit | selected currency | Optional | Allocated fixed costs. Accepts 0 or more. |
| Expected average discount | % | Optional | Sales, promotions and markdowns. |
| Sales tax | % | Optional | — |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Currency.
- Enter Product cost and Target gross margin.
- Optionally add Overhead per unit, Expected average discount and Sales tax.
- Select Calculate.
Worked example
A $18 product with $4 overhead, a 55% target margin and 20% average discounting.
- Cost
- 18
- Margin
- 55
- Overhead
- 4
- Discount
- 20
Net price needed $48.89, so list at $61.11 — selling at $48.89 after discount still delivers 55%.
Frequently asked questions
Should overheads be included in the price calculation?
Allocating them per unit ensures your gross margin actually covers fixed costs. Pricing on product cost alone leaves overheads to be absorbed by volume you may not achieve.