How the price is calculated

The core idea is simple: your price needs to produce enough contribution margin per sale to cover your monthly fixed costs and still hit your monthly profit goal. Because digital products often have low fulfillment costs, the biggest “hidden” costs tend to be fees, refunds, and your time.

Every sale produces revenue, but you lose some of that revenue to payment fees and refunds. You may also have a small per‑sale expense (affiliate commission, customer support tools, file delivery, etc.). We model the “keep rate” like this:

• Keep rate = 1 − fee% − refund%
• Net revenue per sale = Price × Keep rate
• Contribution margin per sale = (Price × Keep rate) − Variable cost per sale

Fixed costs are your monthly tools and subscriptions. But support time is also a monthly “cost” because it takes real hours. We translate your support time into dollars using your hourly value:

• Support cost / month = Support hours × Hourly value
• Operating fixed costs = Fixed costs + Support cost

Time to build is a real investment. Instead of pretending it’s free, we spread (“amortize”) your build investment across a payback window (e.g., recover your build time in 6 months). That produces a monthly “build recovery” cost:

• Build investment = Build hours × Hourly value + One‑time cash costs
• Build recovery / month = Build investment ÷ Payback months
• Total fixed need = Operating fixed costs + Build recovery / month

If you expect S sales per month, your monthly profit is:
Profit = (Contribution margin per sale × S) − Total fixed need.
We set that equal to your profit goal and solve for Price:

• Price = (Profit goal + Total fixed need + (Variable cost × S)) ÷ (S × Keep rate)

That’s it. Everything else in the output (tiers, break‑even, traffic needed) is derived from that base price.

3 quick pricing scenarios

You want $3,000/mo profit. You expect 30 sales/mo. Fixed costs are $300/mo. You spend 6 hours/mo supporting customers, and your hourly value is $100/hr. Variable cost is $2/sale. Fees are 6%. Refunds are 4%. Build time is 60 hours paid back over 6 months.

The calculator will suggest a base price around the $250–$300 range (exact number depends on your inputs), along with tier ideas and break‑even sales.

If you expect 200 sales/mo with the same profit goal, your required price drops dramatically because fixed costs are spread across more buyers. This is why low‑ticket products need volume (and marketing reach) to work.

Suppose refunds jump from 4% to 15%. Your keep rate falls, meaning each sale contributes less. To hit the same profit goal, your price must rise — or your sales forecast must increase — or you must reduce refunds through clearer positioning, better onboarding, and stronger qualification.

A practical pricing workflow (that doesn’t melt your brain)

Pricing gets messy when you try to decide everything at once: value, competitors, tiers, discounts, market maturity, your brand, your risk tolerance. The trick is to separate math constraints from positioning decisions. This calculator handles the math so you can make the positioning calls with more confidence.

Overestimating sales is the most common mistake. If you’re launching, assume a smaller number of sales per month than your optimistic brain wants. Then see what price the math demands. If the price feels “too high,” that’s a signal that you need either (a) more demand, (b) a higher value offer, or (c) a different product shape.

Support looks tiny early, then scales. Even a “simple” digital product creates customer questions. When you price too low, you create a support treadmill. This calculator converts support hours into cost so you can see the hidden load.

A single price forces everyone into one decision. Tiers reduce friction: people who want “just the basics” can buy Lite, and people who want depth can buy Pro or a Bundle. That often increases revenue without increasing traffic.

• Put the price on a landing page and run a small ad test (or share with your audience).
• Offer pre‑orders with a clear delivery date (best validation).
• Run a waitlist + ask one question: “What would make this a no‑brainer?”

You don’t need perfect pricing. You need pricing that is defensible and testable.

Frequently Asked Questions

• Does this calculator tell me what my market will pay?

  No — it tells you what you need to charge to hit a financial goal given your assumptions. Market willingness-to-pay depends on the problem you solve, your proof, your positioning, and alternatives. Use the output as a constraint, then validate with tests.

• What should I use for “hourly value”?

  If you’re freelancing, use your true loaded hourly rate (including taxes/overhead). If you have a job, you can use a “replacement cost” (what it would cost to hire help) or your opportunity cost. The goal is to treat time as valuable.

• Why include build hours? Isn’t that sunk cost?

  It becomes sunk cost only if you ignore it. Pricing should help you recover your investment. The payback window makes this realistic: if you want to recover build time in 6 months, you’re asking the business to repay you faster than if you choose 18 months.

• How do fees and refunds work in the formula?

  We treat fees and refunds as a percentage of price, reducing the “keep rate.” This is intentionally conservative for refunds because refunds can also create extra support work. If your refund policy is strict and refunds are rare, lower the slider.

• Should I price with .99 endings?

  For many digital products, yes — but not always. .99 works well for low-ticket. For premium positioning, round numbers can signal confidence (e.g., $200, $500, $1,000). This tool rounds to friendly “psychological” price points by default, but you can choose a clean number if your brand calls for it.

• What’s a good launch discount?

  Usually 15–30% for a limited time (7–14 days). Bigger discounts can anchor your product as “cheap” and train your audience to wait. If you want a stronger incentive, add bonuses instead of cutting price.

• Is a low price always better for virality?

  Not necessarily. Virality comes from clarity and shareability. A price that’s too low can create support overload and weak positioning. Better approach: keep Lite affordable, price Pro for sustainability, and make the upgrade path irresistible.

• What if my required price feels “impossible”?

  That’s useful data. It usually means one of three things: (1) your offer needs more value, (2) your sales forecast is too low for your profit goal, or (3) your costs/time assumptions are too heavy for this product type. Try adjusting one lever at a time and see what changes most.

Make it shareable (without being spammy)

If you want this tool (and your product) to spread, the best “viral” move is to make the result easy to screenshot and compare. Here are three share prompts you can steal:

• “Math says my price needs to be {{price}} to hit my goal — what would you pay?”
• “My break‑even is {{breakeven}} sales/mo — is that realistic?”
• “If my conversion is {{conv}}%, I need {{traffic}} visitors/mo.”

People love comparing assumptions. That’s why the calculator includes a confidence score and “traffic needed” — it turns pricing into a discussion instead of a lonely guess.