Pricing for profit

Product pricing profit calculator guide

A product price should leave room for variable costs, target profit, and paid acquisition. If it does not, ROAS targets can become unrealistic.

What this means

Pricing is not only about markup. For paid traffic, the price needs to support contribution margin, break-even CPA, and the target profit you want to keep after ads.

Formula

availableForAds = contributionMargin - targetProfitAmount

If availableForAds is negative, the target margin is not possible at the current price and cost stack.

Example

If net revenue is $50 and contribution margin is $12, a 20% target margin needs $10 profit. That leaves only $2 available for ads, which may be too restrictive for cold traffic.

Common mistakes

  • Setting price from competitor pages without checking your own cost stack.
  • Running discounts that remove the CPA room needed for acquisition.
  • Ignoring fixed per-order fees on low-ticket products.
  • Using one target margin for every product category.

Calculator

Use SellMira to test price, discount, costs, and target margin before increasing ad spend.

Check pricing margin