Selling Price
Also called: sale price, list price
What is Selling Price?
Selling price is the amount a customer pays for one unit of a product or service. Depending on the trade it may be quoted inclusive or exclusive of tax, and it is the denominator in every margin calculation.
Why Selling Price matters
Selling price is where cost, competition and positioning meet. Setting it from cost alone ignores what the market will bear; setting it from competitors alone ignores whether you can afford to sell at that price.
Selling Price formula
Selling price = Cost ÷ (1 − target margin as a decimal)
Using cost × (1 + markup) instead gives a price based on markup, which is a different number.
How Selling Price works in practice
Work out the price your target margin needs, compare it to the market, and treat any gap as information — either your costs are out of line or your positioning has to justify the difference.
Frequently asked questions
Divide cost by 0.6. A ₹300 cost needs a ₹500 price.