True Product Pricing Calculator Australia

How the calculator solves the price

A simple markup starts with cost and multiplies it. This tool works backwards from the selected profit margin. It separates customer price from ex-GST revenue, subtracts percentage-based selling costs and returns allowance, then checks whether enough revenue remains to cover the fixed cost per sale and target profit.

The break-even price uses the same costs with the profit target removed. That makes it clear how much discounting room exists before the sale stops contributing profit.

How to use the pricing result

Use an average advertising cost per completed sale, not cost per click. Include packaging, pick-and-pack, outbound shipping paid by the business and a realistic returns or discount allowance. When returns are expensive, the allowance should reflect lost shipping, processing, markdowns and unrecoverable stock—not only the refund.

This form solves for a price; it has no promotion-price input. To test a discount, calculate the proposed sale price, then enter that price and the relevant costs in the Profit Margin Calculator. For GST, returns, fulfilment and paid acquisition together, use the Ecommerce Profit and Break-Even ROAS Calculator.

Important pricing limitations

The calculator works at the order or unit level. It does not allocate annual fixed overhead such as rent, salaries, software subscriptions and professional fees unless those costs are converted into an amount per sale. It also does not model input-tax credits, inventory write-offs, refunds of transaction fees, multi-item orders or different tax treatments.

Target profit margin is calculated against ex-GST revenue because GST collected is not treated as business revenue in this model.

Worked pricing scenarios

Ecommerce product with paid advertising

Enter A$27 product cost, A$8 fulfilment, A$20 advertising per sale, A$2 other direct cost, a 2.9% payment fee, A$0.30 fixed fee, an 8% returns/discount allowance, a 20% target margin and GST registered. Fixed costs total A$57.30. The price is A$57.30 ÷ [(1 − 0.20) ÷ 1.10 − 0.029 − 0.08] = A$92.68 including GST, rounded.

At the unrounded solved price, revenue excluding GST is A$84.25, GST is A$8.43, variable fees plus the allowance total A$10.10, and contribution profit is A$16.85 per sale, rounded. That is 20% of ex-GST revenue. The corresponding zero-profit customer price is A$71.62. Test higher advertising costs or a higher allowance by changing those inputs; test a specific promotional selling price in the linked tools.

Organic sale versus paid sale

Run one scenario with advertising cost set to zero and another with the realistic paid acquisition cost. This shows how much margin organic demand contributes and whether the paid channel can scale without destroying contribution profit.

Wholesale or marketplace order

Replace the payment fee with the marketplace or wholesale commission and include pick-and-pack charges. Do not use the direct-store price model unchanged when the fee structure is different.

Edge cases to check

• A target margin plus percentage fees that leaves no price capable of recovering fixed costs.
• GST-inclusive customer pricing entered while treating all revenue as yours.
• Returns entered only as refunded revenue while ignoring lost fulfilment and return freight.
• Average advertising cost that excludes unsuccessful campaigns or creative production.