Product Pricing Margin Calculator

Formula and inputs

Landed unit cost is supplier cost plus per-unit freight, duties, packaging, payment or marketplace fees, and an allowance for returns. At a candidate price, monthly revenue is price times expected units, and COGS is landed cost times the same units; the calculator returns gross and net margin, with operating expenses covering the costs that do not scale per unit.

Example scenario

DTC product price check

A seller prices a kitchen product at $42. Supplier cost is $14, freight and duties add $3.50 per unit, packaging $1.20, payment processing $1.55, and a 6 percent return rate effectively adds $2.50. At 450 units a month, revenue is $18,900 against $10,240 in direct costs.

• -Revenue: $18,900 (450 units x $42)
• -Cost of goods sold: $10,240 (landed $22.75/unit)
• -Operating expenses: ads, software, and fulfillment overhead entered separately
• -Industry: ecommerce benchmarks

Gross margin is 45.8 percent, not the 66 percent the supplier-cost math implied. Whether $42 works now depends on operating costs, especially advertising: at a $9 blended acquisition cost per order, the remaining margin must still clear overhead, which is the real pricing constraint for DTC products.

Common mistakes

• -Pricing from supplier cost and discovering landed cost at the first reorder.
• -Ignoring returns, which function as a per-unit cost no matter how they feel.
• -Using one price across channels whose fees differ by ten points or more.

How to interpret the output

• -If the margin at a competitive price cannot fund acquisition cost, the product, not the ad account, is the problem.
• -Wholesale pricing needs the margin math run at the wholesale price with its own cost structure, not a blanket 50 percent off retail.
• -Re-run pricing whenever freight or supplier terms change; landed cost drift is the silent margin killer.

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