Cost per Product
With the Cost per Product calculator, you can instantly see what a product really costs you.
With the Cost per Product calculator, you can instantly see what a product really costs you. Many entrepreneurs only look at the purchase price, but forget to include fixed costs such as rent, software, marketing and administration.
By fairly allocating all costs across the number of products sold, you get a realistic view of your cost per product.
What are product costs?
The cost per product consists of two parts:
- Variable costs: costs that vary per product
- purchasing
- packaging
- shipping
- Fixed costs: costs that are independent of sales volume
- rent
- subscriptions
- marketing
- administration
Cost per product formula
- Total costs = fixed costs + (variable costs × number of products)
- Cost per product = total costs ÷ number of products
Why calculating the cost per product is important
- prevents setting sales prices too low
- helps with margin and profit calculations
- provides insight when scaling up
- supports your pricing strategy
Who is this tool suitable for?
- online stores
- manufacturers
- self-employed professionals
- small business owners
- startups
Frequently asked questions
Does this include VAT?
No, it is exclusive of VAT by default.
Can I use this for a specific period?
Yes, for example per month or per year.
What if I sell more?
Your fixed costs per product will decrease, which often leads to higher margins.