To get a selling price for a target margin, divide your cost by (1 − margin). For a 25% margin on a ₦22,000 cost, the price is ₦22,000 ÷ 0.75 = ₦29,333. Simply adding 25% to cost gives only a 20% margin. Enter your numbers below.
How the Selling Price Calculator works
- Enter your full cost per item.
- Enter the profit margin you want as a percentage of the price.
- The calculator divides cost by (1 − margin).
- See the price, the profit and the markup it needs.
Worked example
A furniture maker's cost for a centre table is ₦22,000, and she wants a 25% margin.
Price: ₦22,000 ÷ 0.75 = ₦29,333.33
Profit: ₦7,333.33
Markup needed: 33.33%
Adding 25% to cost would give ₦27,500, a margin of only 20%.
Common mistakes to avoid
- Adding the margin percentage to cost
- Leaving out labour and overheads from cost for made-to-order work
- Setting a margin above 100%, which is impossible
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Why margin pricing protects you
Your rent, salaries and other costs are paid from your margin. Pricing with a target margin makes sure each sale covers its share, even when the cost of goods changes.
When to use this
Use it for made-to-order work, new products and quotes, where you control the price. For goods with fixed market prices, use the profit margin calculator to check whether the market price still works for you.
Frequently asked questions
What is the formula for selling price?
Selling price = cost ÷ (1 − margin). For 30% margin: cost ÷ 0.7.
Why not just add the percentage?
Adding 25% to cost gives a 20% margin, not 25%.
Can margin be 100%?
No. It would mean the cost is zero.
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