Field notes
Use the required price as your minimum
The required price is the lowest price in cents that reaches your chosen gross margin at the cost you entered. Use it as a reference for a listed price, a quote, or a customer's offer. You can choose a higher price. A lower one falls below the target while cost stays the same.
Why a displayed percentage can be misleading
Suppose your cost is $19 and your target margin is 35%. The required selling price is $29.24. Gross profit is $10.24 and the achieved margin is about 35.02%.
At $29.23, the margin is approximately 34.9983%. It displays as 35%, but remains below the target. At $29.24, the target is met.
The gap is tiny, but it matters when you need a price that actually meets a minimum. Compare your proposed price with the required price rather than relying only on a rounded percentage.
Check the amount you will actually charge
A price chosen for its appearance or agreed during a negotiation may differ from the calculated amount. In this example, $29.99 stays above the required minimum; $29.00 falls below it.
Use margin and markup to check your final price. If you plan a percentage reduction from a listed price, use discount and profit to see its effect.
Keep the cost behind the target current
If your purchase cost, materials, or direct labor changes, calculate again. Match cost to the same product, service, or order that the price covers. Reaching a gross margin target does not establish take-home earnings: expenses outside the entered cost still need covering, and the calculator does not determine what customers will pay.