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.

Run the model again at promotional prices. A full-price margin can look healthy while a common 20% discount pushes the order close to break-even.

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

Assume A$27 landed product cost, A$8 packaging and fulfilment, A$20 advertising cost per sale, A$2 other direct cost, a 2.9% payment fee, A$0.30 fixed fee and an 8% returns/discount allowance. A target margin must be calculated after GST and percentage costs, not by simply adding 20% to A$57.

The result should be stress-tested with a higher acquisition cost and returns allowance. A product that works only when every sale arrives at the best-case advertising cost is not safely priced.

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.