← Back
💰 Pricing Calculator
Calculate Profitable Pricing
Reviewed by Dan Cooper
Pricing Strategist • 11 years • 300+ companies advised
$
Include ALL costs: materials, labor,
overhead
%
💡 Pro Tips
- Markup ≠ Margin (huge mistake): 50% markup means $100 cost → $150 price (33% margin). 50% margin means $100 cost → $200 price (100% markup). Margin = (Price - Cost) / Price. Markup = (Price - Cost) / Cost. Confusing these will bankrupt you.
- Price on value, not cost-plus: Software costs $0 to replicate but sells for $99/month. Why? Value. If your service saves client $10k/year, charge $3k, not "$50/hour × 20 hours = $1k." Value-based pricing. 3x more profit.
⚠️ Common Mistakes
- Confusing margin with markup: Want 50% profit, so you add 50% markup. Wrong! 50% markup = 33% margin. To get 50% margin, you need 100% markup (double your cost).
- Forgetting overhead in cost calculation: Product costs $20 materials + $10 labor = $30 total cost. WRONG. Add rent, utilities, insurance, marketing = real cost $45. Price at $60 thinking thats 50% margin? Actually only 25%.
- Pricing based on hours instead of value: 10 hours work at $100/hr = $1,000. But service saves client $50k/year. Youre leaving $40k on table. Charge for value delivered, not time spent.