Why isn't this just COGS divided by (1 - margin)?

That simpler formula ignores payment processing fees and ad acquisition costs, both of which scale with the final price or apply per sale — leaving them out understates the price you actually need to hit your real target margin.

What if I don't run paid ads for this product?

Set the ad CPA target to 0 — the calculation still works, and the required price will reflect just COGS, fees, and your target margin.

What's a typical payment gateway fee?

Many card processors charge around 2.9% plus a small fixed fee (often around $0.30) per transaction, though rates vary by provider, volume, and payment method — check your actual processor's rate.

Does this account for shipping costs?

Not directly — if you absorb shipping cost into your product price rather than charging it separately, add it into your COGS figure so it's reflected in the required price.

Product Pricing & Target Profit Margin Matrix

Finance

Solve for the exact price that hits your target margin.

Cost inputs

Solves for the price needed to hit your target margin.

Cost of goods (COGS)

Target profit margin (%)

Target ad CPA (cost per sale)

Payment gateway fee (%)

Gateway fee (fixed)

Required listing price

$35.55

COGS$12.00

Payment fees$1.33

Ad CPA target$8.00

Net profit per sale$14.22

40.0% margin after everything

About this tool

Enter your cost of goods, target profit margin, ad acquisition cost target, and payment gateway fees, and instantly get the precise retail price required to hit your margin after every cost is accounted for — not just a rough markup guess.

How to use Product Pricing & Target Profit Margin Matrix

1
Enter your cost of goods sold (COGS) per unit.
2
Set your target profit margin as a percentage.
3
Enter your target ad acquisition cost (CPA) per sale, and your payment gateway's fee structure.
4
Read the exact price required, along with your true net profit per sale after everything.

Frequently asked questions

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