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Pricing and profit margin — two-scenario comparison

Compare selling price, cost, payment fees, gross margin and target markup. Compare two complete sets of assumptions, including independent input settings for each scenario.

Five planning modes, one calculator topic

These modes share an underlying model, not five unrelated formulas. This advanced mode is excluded from search indexing. Visit the main pricing and profit margin calculator for the topic overview.

Planning mode: Compare two complete sets of assumptions, including independent input settings for each scenario. Adjust the inputs to fit your situation. Related tools share an underlying model, with distinct calculation, reverse-solve, comparison and sensitivity functions.

Your numbers

$
$
%
$
%
units
$
$
%
$
%
units

Scenario B result

25.3%

Scenario A: 37.0%. Net contribution margin.

Scenario A main result
37.0%
Scenario B main result
25.3%
Numeric difference (B − A), in result units
-11.7
A — Selling price
$60
A — Unit cost
$28
A — Fees and shipping
$9.8
A — Contribution per unit
$22.2
A — Price at target margin after fees
$49.25
A — Monthly contribution at entered units
$5,550
B — Selling price
$60
B — Unit cost
$35
B — Fees and shipping
$9.8
B — Contribution per unit
$15.2
B — Price at target margin after fees
$59.7
B — Monthly contribution at entered units
$3,800

Assumptions to check

  • Tax, returns, overhead and promotional discounts may change profit.

How this is calculated

Run the same model for each set of assumptions. Subtract product cost, percentage fees and fulfillment from price; divide contribution by price. Target price = (unit cost + shipping) / (1 − target margin − percentage fees).
  1. 1Keep baseline settings fixed for a one-input comparison, or enter all settings separately for a two-scenario comparison.

Assumptions and limits

  • Fees and costs are entered by user; taxes, refunds, overhead and channel-specific rules may change profit.
  • Tax, returns, overhead and promotional discounts may change profit.

Practical guide

Understanding pricing and profit margin — two-scenario comparison

Everyday editorial team · GEOINNOVATION CO., LTD · Published · Updated

What this calculation is for

A product-margin calculation distinguishes the markup on cost from the portion of selling price left after costs. Payment fees and fulfillment can make a seemingly generous markup leave little operating contribution.

How the method works

Selling price minus product cost, percentage selling fees and fulfillment gives unit contribution. Dividing by price gives margin; the target-price equation also accounts for the fee percentage. The displayed model uses: Net contribution = price − cost − selling fees − fulfillment; margin is contribution ÷ price.

A worked example

For an illustrative pricing and profit margin scenario, use Unit cost: 28 $; Selling price: 60 $; Payment and marketplace fee: 8 %; Shipping and fulfillment per unit: 5 $; Target net margin: 25 %; Units sold per month: 250 units. The modeled net contribution margin is 37.0%. These are example assumptions, not current prices, official benefit amounts or personalized advice.

Assumptions and real-world differences

Contribution is not net profit after all overhead. Returns, tax, advertising, fixed expenses and fee minimums may be missing. Some target-margin and fee combinations cannot produce a finite profitable price. Fees and costs are entered by user; taxes, refunds, overhead and channel-specific rules may change profit.

Building two independent scenarios

Scenario A and Scenario B each have a complete set of inputs for this pricing and profit margin calculation. Change several inputs in B when comparing genuinely different plans, then inspect the B-minus-A headline difference and the detailed rows. When multiple inputs change, the total difference cannot be attributed to just one of them.

Reproduce this tool’s example

These fixed example inputs are independent of edits you make above. Enter them in this tool to reproduce the result, then replace them with your own assumptions.

Scenario A — Unit cost
28 $
Scenario A — Selling price
60 $
Scenario A — Payment and marketplace fee
8 %
Scenario A — Shipping and fulfillment per unit
5 $
Scenario A — Target net margin
25 %
Scenario A — Units sold per month
250 units
Scenario B — Unit cost
35 $
Scenario B — Selling price
60 $
Scenario B — Payment and marketplace fee
8 %
Scenario B — Shipping and fulfillment per unit
5 $
Scenario B — Target net margin
25 %
Scenario B — Units sold per month
250 units

Scenario B result: 25.3%

Scenario A: 37.0%. Net contribution margin.

  • Scenario A main result: 37.0%
  • Scenario B main result: 25.3%
  • Numeric difference (B − A), in result units: -11.7

Frequently asked questions

Is a 50% markup a 50% margin?
No. A $10 cost sold for $15 has 50% markup but only about 33.3% margin before other costs.
Which inputs should I check before using this pricing and profit margin estimate?
Check unit cost, selling price, payment and marketplace fee, shipping and fulfillment per unit, target net margin, units sold per month. Match each field’s unit and time period, then compare the detailed rows rather than treating the headline alone as the complete answer.
Why is this different from the one-factor comparison?
The one-factor tool changes only unit cost. This version lets all model inputs differ, so it is more flexible but does not isolate the effect of any single change.

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