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Price for Target Margin

Find the price that yields a target margin at a given cost.

About Price for Target Margin

Backing into a price from a target margin divides cost by one minus the margin, solving for the price rather than accepting whatever markup a habit produces. Margin-target pricing keeps discounts and promotions from silently eroding the profit built into every sale.

Formula

Price for Target Margin

Price = cost / (1 - target margin%)

target margin
Desired profit as a share of the final price

Worked example

With the default values below, Price for Target Margin returns Required Price of $16.67. Change any input above and every figure here is recalculated in your browser.

Inputs used

Cost per unitminimum 0
10
Target marginaccepts 1–99 %
40 %
Units to sellminimum 0
1,500

Results

Required Price
$16.67
Profit per Unit
$6.67
Equivalent Markup
66.67%
Total Revenue
$25,000.00

Step by step

  1. 1Values used
  2. 2Price for Target Margin
  3. 3Required Price= 16.67
  4. 4Profit per Unit= 6.67
  5. 5Equivalent Markup= 66.67
  6. 6Total Revenue= 25,000.00

Assumptions and limits

  • The result is derived only from the 3 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or compounding frequency into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is Price for Target Margin calculated?

Price = cost / (1 - target margin%) Backing into a price from a target margin divides cost by one minus the margin, solving for the price rather than accepting whatever markup a habit produces.

Why does Price for Target Margin matter?

Margin-target pricing keeps discounts and promotions from silently eroding the profit built into every sale.

What values do I need to enter?

This calculator takes 3 inputs: Cost per unit, Target margin, Units to sell. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.

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