The Product Profit Checker calculates your ecommerce product margins instantly, helping you crosscheck your costings and gain a better understanding of which products are giving you the profit margins you need to build a sustainable business.
The Product Profit Checker calculates your ecommerce product margins instantly, helping you crosscheck your costings and gain a better understanding of which products are giving you the profit margins you need to build a sustainable business.
Quick video explainer
The Product Profit Checker calculates your e-commerce product margins instantly. It helps you understand whether your pricing will actually deliver the profit margins you need to build a sustainable business.
Before you start, gather four key numbers. Your cost of goods sold (the actual cost to produce and prepare your product for shipment). Your retail price (what customers pay, including any taxes). Your operating overhead rate as a percentage of revenue. And your target profit margin.
Enter the cost to get your product ready to ship to your customer. This is your fully landed cost. Example: $200.
Enter what the customer pays, including all taxes (GST/VAT). Example: $700.
Set your country's sales tax rate - 10% (Australia), 20% for UK, 0-6% for USA and so on.
Enter your operating expenses as a percentage of revenue (not a dollar amount). This includes marketing, fulfilment, salaries, rent, software - everything except COGS. If you spend $45 in keeping the business running for every $100 in revenue, enter 45%.
Enter your desired profit margin as a percentage. Example: 15%.
The tool displays your actual profit amount, actual profit margin, and whether you're hitting your target. You'll also see retail price excluding GST/VAT, COGS as a percentage of revenue, and total overhead cost for this product.
Once you find your sweet spot, use the COGS multiplier to price new products quickly. If your multiplier is 2.9, multiply any new product's COGS by 2.9 to get a retail price that hits your target margins.
Example: Product costs $200, overhead rate is 45%, retail price is $580, target margin is 15%. Multiplier = 2.9. For a new $300 product, multiply by 2.9 to get $870 retail price.
This assumes consistent overhead rates across products.
