Price, volume and fixed costs are one equation
A price cannot be judged without a volume. The same $40 price can produce a healthy monthly profit at 600 units and a loss at 250 units if fixed costs are $4,000. Target profit pricing makes that relationship explicit: price, variable cost, fee rate, fixed costs, volume and profit are solved together.
This is different from a per-order break-even price. The per-order floor asks what one order must cover. This calculator asks what price the whole month needs, given the number of orders you expect to sell.
Two target modes, never stacked
Profit mode takes a monthly dollar target: after variable costs, fees and fixed costs, the business should keep that amount. Margin mode takes a percentage of revenue: profit should equal that share of sales. They are different constraints, and the calculator uses only the selected one.
Mixing the two — for example, adding a target profit amount and a target margin on top of each other — would silently double-count the profit requirement. The mode switch prevents that.
Worked example: a $2,000 monthly profit target
Unit cost $20, variable cost $5, fee rate 3%, fixed costs $4,000, planned volume 400 and target profit $2,000. Required price is (20 + 5 + (4,000 + 2,000) ÷ 400) ÷ 0.97 = 41.24. Contribution per unit is 41.2371 × 0.97 − 25 = 15.00. Monthly revenue is 16,494.85 and profit is 2,000.
Break-even units at that price are 4,000 ÷ 15 = 266.67, rounded up to 267. The achieved margin is 12.1% of revenue. That is not a 20% margin; it is the margin implied by a $2,000 profit target at this volume.
Worked example: a 20% margin target
With the same costs and a 20% target margin, required price is ((20 + 5) × 400 + 4,000) ÷ (400 × (1 − 0.03 − 0.20)) = 45.45. Monthly profit becomes 20% × 45.45 × 400 = 3,636.36. The price is higher than the profit-target example because a percentage margin scales with revenue, not with a fixed dollar goal.
This is a useful sanity check: a 20% margin target is not the same as “cost plus 20%”. The fee rate and fixed-cost allocation both change the answer.
Volume sensitivity: the plan rarely lands exactly
At 400 units the profit-target price is 41.24. At 300 units the same $2,000 profit requires 46.39; at 200 units it requires 56.70. At 500 units it falls to 38.14. The table makes the trade-off visible before the month starts.
Use the table to decide whether the planned price is realistic across a range, not just at the midpoint. If the low-volume price is far above the market, the plan depends on hitting the high end of the volume forecast.
Where the model stops
The model assumes one price, one product and a fixed cost pool allocated entirely to this product. It does not forecast demand, model competitor reactions, handle tiered pricing, discounts, returns, tax or chargebacks. It also does not tell you whether customers will pay the required price.
Use it as a constraint check. For a per-order price floor, use the Shopify break-even price calculator. For the full order P&L after returns and tax, use the Shopify net profit calculator.