Calculate a cent-based suggested retail price or maximum landed unit cost in USD. Choose a margin or markup target after the percentage channel fee, and optionally include a planned discount.

USD model. Margin uses discounted sale revenue; markup uses landed cost. Profit here is after the channel fee and entered unit costs.

Optional costs and sale adjustments · blank = 0

Charged on discounted sale revenue. Do not also include this fee in unit cost.

Related Calculators

Suggested Retail Price Formula

This calculator models contribution profit after the entered landed cost and channel fee. Margin is that profit divided by discounted sale revenue; markup is that profit divided by landed cost. These are entered-cost pricing measures, not accounting gross or net profit. The margin-based SRP formula is:

SRP = (C) / ((1 - m - f)(1 - d))

Where:

  • SRP = suggested retail price
  • C = total cost of the item
  • P = contribution profit after entered cost and channel fee
  • m = target margin as a decimal
  • u = target markup as a decimal
  • f = channel fee as a share of discounted sale revenue
  • d = discount from SRP as a decimal
  • S = discounted sale revenue, SRP × (1 − d)

For markup, SRP = C × (1 + u) ÷ [(1 − f)(1 − d)]. For maximum cost, the margin model uses C = SRP × (1 − d)(1 − m − f); the markup model uses C = SRP × (1 − d)(1 − f) ÷ (1 + u). Contribution profit is:

P = SRP(1 - d)(1 - f) - C
C = SRP(1 - d)(1 - m - f)

How to Calculate Suggested Retail Price

  1. Determine the full unit cost of the product.
  2. Choose margin or markup and enter the target percentage.
  3. Enter optional unit costs, percentage channel fee and planned discount. Blank optional amounts mean zero.
  4. Select Calculate. SRP rounds upward to a cent; maximum allowable cost rounds downward.

For accurate pricing, your unit cost should include more than just the purchase or production cost. Many pricing errors happen because part of the real cost is left out.

What to Include in Item Cost

  • Materials or wholesale acquisition cost
  • Direct labor
  • Packaging
  • Shipping or inbound freight
  • Fixed transaction costs, excluding the percentage channel fee entered separately
  • Other marketplace or fulfillment unit costs, without double-counting the percentage channel fee
  • Storage or warehousing
  • Expected returns, spoilage, or damage allowance
  • Allocated overhead if you want fully loaded pricing

Example Calculation

With no channel fee or discount, a $100 landed cost and a 50% markup give $50 contribution profit and this suggested retail price:

SRP = 100 + 50
SRP = 150

In this case, your selling price would be $150 per unit.

Markup vs. Margin

Markup and margin use different denominators. Here P is contribution profit after the entered cost and fee, and S is discounted sale revenue. In the fee-free, undiscounted example, S equals SRP.

Metric Formula Based On Use Case
Markup %
Markup% = (P) / (C) × 100
 Cost Useful when pricing from cost upward
Margin %
Margin% = (P) / (S) × 100
 Discounted sale revenue Useful when targeting profitability on revenue

Using the example above:

Markup% = (50) / (100) × 100 = 50%
Margin% = (50) / (150) × 100 ≈ 33.33%

A product can have a 50% markup and only a 33.33% margin at the same time. That difference matters when comparing pricing goals across products.

If You Price by Target Margin Instead of Dollar Profit

When the channel fee and discount are both zero, the margin formula simplifies to:

SRP = (C) / (1 - m)

Where m is the target margin written as a decimal. For example, a 40% margin is 0.40.

If your cost is $60 and you want a 40% margin:

SRP = (60) / (1 - 0.40)
SRP = (60) / (0.60) = 100

When This Calculator Is Most Useful

  • Setting a starting retail price for a new product
  • Checking whether a proposed selling price meets a profit target
  • Comparing different profit scenarios before launch
  • Creating quick price sheets for internal planning
  • Testing how cost changes affect retail pricing

Common Pricing Mistakes

  • Ignoring hidden costs: fees, returns, and freight can reduce profit quickly.
  • Confusing markup with margin: this often leads to underpricing.
  • Using profit targets that are too low: the price may not support overhead or future discounts.
  • Skipping market validation: a mathematically correct price still needs to fit customer expectations.
  • Forgetting taxes or channel deductions: the amount you collect is not always the amount you keep.

Practical Pricing Tips

  • Build your SRP from a fully loaded unit cost whenever possible.
  • Create a minimum acceptable price and a target price.
  • Leave room for coupons, wholesale pricing, or seasonal promotions.
  • Review pricing whenever supplier costs or shipping rates change.
  • Track actual profit after launch and compare it to your planned profit.

Frequently Asked Questions

Is suggested retail price the same as final selling price?
Not always. SRP is often the starting point before discounts, channel fees, negotiated pricing, or promotional adjustments.

Should I use unit cost or total batch cost?
Use unit cost. If you only know batch cost, divide the total batch cost by the number of units first.

Can I use this calculator for services?
Yes. Enter the unit delivery cost, choose a target margin or markup, and include any applicable percentage fee and discount assumptions.

What happens if my desired profit is zero?
A 0% target breaks even on the modeled costs, but fees and discounts can require an SRP above cost. Expenses not entered and actual settlement rounding can change the realized result.