Product Pricing Calculator

Most DTC founders price products by looking at competitors, applying a standard markup to COGS, or simply picking a number that feels right. None of these approaches account for the full cost stack that determines whether each sale is actually profitable. This calculator works backwards from your target contribution margin to tell you the minimum price you need to charge.

The formula accounts for every variable cost that eats into your margin: cost of goods, shipping and fulfillment, payment processing fees, and your target customer acquisition cost from advertising. It then solves for the retail price that delivers your desired contribution margin percentage after all of these costs are subtracted.

The price sensitivity table shows how margin changes across a range of price points, making it easy to find the sweet spot between competitiveness and profitability. A product that seems viable at $65 might need to be $78 to deliver a 25% contribution margin once you account for $18 COGS, $6 shipping, 2.9% processing, and $15 in ad cost per order.

This is especially important for brands launching new products or entering new markets. Setting the price too low locks you into a margin structure that cannot support profitable advertising, meaning you either lose money on every ad-driven sale or cannot afford to advertise at all. Set the price right from the start using actual cost data rather than gut feel, and you give yourself room to run promotions, absorb rising ad costs, and still maintain healthy margins as you scale.