Verified Mathematical Model & Formulation
Selling Price = Cost / (1 - Desired Profit Margin %)
Applies inverse margin formulation so that dividing by the complement of your target percentage achieves the exact requested profit ratio upon sale.
Configurable Parameters & Standard Units
- Total Unit Cost ($): (Default: 20 usd)
- Desired Profit Margin (%): (Default: 40 percent)
Standard Worked Example & Practical Verification
Scenario: Product landed cost is $16.50 and the seller desires a 45% margin.
Calculated Solution
$30.00 Selling Price ($13.50 Profit)
Practical Takeaway: Notice $30.00 is higher than simply adding 45% ($7.43) to cost.
Frequently Asked Questions
Why is Cost ÷ (1 - Margin) different from Cost × (1 + Margin)?
Cost × (1 + Margin) is a markup calculation on cost. To achieve a true margin on the final selling price, you must divide by (1 - Margin).