Pricing Strategy
Optional promotional discount
Pricing Results
Regular Price
$60.00
Sale Price
$54.00
Gross Profit
$30.00
Gross Margin
50.00%
Frequently Asked Questions
What is cost-plus pricing?
Cost-plus pricing adds a fixed markup percentage to your cost. Formula: Price = Cost × (1 + Markup%). Simple and guarantees profit, but ignores market demand and competitor pricing. Best for commodity products.
What is margin-based pricing?
Target a specific gross margin: Price = Cost ÷ (1 − Margin%). A 50% margin on a $30 product = $60 price. Note: a 50% margin ≠ a 50% markup. Margin is calculated on price; markup is on cost.
How should I factor in discounts?
Build discounts into your pricing strategy. If you plan to offer 20% off, set your regular price 25% higher than your target "effective" price so you hit your margin goal even during sales. Never discount below your cost.
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