Product Pricing Calculator
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Combine material cost, labor time, and target margin into a suggested price.
Rates last reviewed: July 2026
Product costs
Suggested price
$103.33
Cost: $62.00 · Profit: $41.33
- Total cost
- $62.00
- Achieved margin
- 40.0%
Related calculators
Cost-plus pricing
Cost-plus pricing with a target margin sets selling price from total cost and the profit share you want on the final price — not on cost. Total cost = materials + (labor hours × hourly rate). Price = cost ÷ (1 − target margin ÷ 100). This ensures achieved margin equals your target when costs are accurate. The approach is common among makers, print shops, and service businesses that know their production inputs before they know what the market will bear.
The frequent mistake is multiplying cost by (1 + margin%). If cost is $62 and you multiply by 1.40, you get $86.80 — but profit of $24.80 is only 28.6% of price, not 40%. True 40% margin requires price = $62 ÷ 0.60 ≈ $103.33 because margin is profit divided by price, not profit divided by cost. Markup formulas use cost as the base; margin formulas use price as the base — mixing them silently underprices handmade goods.
Labor rate should reflect fully loaded shop time, not just take-home wage. Include overhead you want each product to cover: studio rent, tools, insurance, listing fees, and non-billable admin. Many makers use an hourly shop rate 2× to 3× their desired wage to capture overhead inside cost-plus math. If you bill $25 per hour but need $50 to fund the business, enter $50 in the rate field or your margin target will overstate sustainability.
Market ceiling may reject your cost-plus price even when the math is internally consistent. If competitors sell similar goods for $75 and your cost-plus result says $103, you face a strategic fork: cut costs, accept lower margin, differentiate enough to justify premium pricing, or pivot channels. Cost-plus tells you the floor for sustainability; market research, reviews, and conversion rates tell you the ceiling for volume.
Platform fees belong in the picture for online sellers. Etsy, Amazon, and Shopify take percentages of selling price plus payment processing. Either add expected fees to cost before margin math or bump target margin to absorb them — otherwise net profit after fees falls below your intended margin. Run a fee calculator on the suggested price to see take-home after platform charges before you finalize listings.
Photography, listing SEO, and customer service time often get omitted from labor hours. If each product requires 30 minutes of non-production work, add 0.5 hours to the labor field or your hourly earnings look higher than reality. Sustainable pricing treats the full lifecycle of getting an item from raw materials to a shipped order as billable shop time.
Worked example with defaults: $12 materials + 2 hours × $25/hr = $50 labor → total cost $62. Target 40% margin → price = $62 ÷ 0.60 ≈ $103.33. Profit ≈ $41.33. Achieved margin = $41.33 ÷ $103.33 ≈ 40%. Round to $104 or $105 for a clean shelf price, then subtract marketplace fees to confirm net still meets your goal.
Pricing outputs are business planning estimates — not tax advice. Revenue reporting and expense categorization follow IRS business income rules for sole proprietors and other entities. Materials may be tracked as cost of goods sold while some overhead belongs on Schedule C expense lines — classification affects taxable profit. Consult a qualified accountant for COGS versus expense treatment on your return.
Official sources
Rates and formulas in this calculator reference the documentation below. Confirm current numbers on the source site before relying on them. Links do not imply endorsement by those organizations of Calcometry or this tool.
Common questions
Margin vs markup — why divide by (1 − margin)?
Margin is profit as a share of selling price. To keep 40% of the price as profit, cost must be the other 60%. Price = cost ÷ 0.60. Markup would instead use cost × (1 + markup%), which yields a lower price and smaller profit share for the same target. This calculator uses margin-on-price because that is how many makers and retailers define their profit goal.
Should I include overhead in labor rate?
Many makers use a shop rate that includes tools, rent, and admin time, not just take-home wage. A $25 wage might become a $45 to $55 loaded shop rate. Use whatever fully loaded rate reflects your real cost to produce one unit. Separately tracking overhead works too — just do not double-count it in both rate and materials.
Does this include platform fees?
No. Add Etsy, Amazon, or payment processing fees to costs, or use our POD or marketplace fee calculators on the suggested price to see net after charges. Listing the cost-plus price without fee adjustment often overstates achievable margin by 6% to 15% depending on channel.
What hourly rate should I use?
Cover the wage you need plus business overhead each product should fund. Many artisans target $25 to $50 or more as a loaded shop rate depending on skill, market, and local cost of living. Hobby pricing often uses minimum wage; sustainable business pricing uses a rate you could pay an employee plus employer burden.
Can I use this for services?
Yes — set material cost to zero and enter billable hours multiplied by rate. Add pass-through expenses like filament, blanks, or subcontractor fees as material cost. The same margin formula applies whether you ship a physical product or deliver a consulting deliverable.