Price-to-Cost Ratio Calculator
Measure the 'Multiplier' of your business. Calculate the ratio between your selling price and your cost base to determine scalability and brand power.
Inputs
Healthy Standard
Standard for direct-to-consumer.
Multiplier Health
4.00x Ratio
Sustainability
Healthy. You have room to operate.
Wholesale Readiness
Ready. You have enough room to offer 50% off to retailers.
Value Creation
You create $75.00 of value for every unit sold.
Execution Steps
Enter your Unit Cost (COGS).
Enter your Selling Price.
The tool calculates your Ratio (Multiplier).
Compare against industry benchmarks (Retail ~2-3x, SaaS ~10x, Luxury ~10x).
Pro Strategy
- If you sell wholesale, you need at least a 4x-5x ratio to allow everyone (Distributor, Retailer) to take a cut.
- Software businesses often have infinite ratios on marginal cost, but calculate ratio on CAC (Acquisition Cost) instead.
- Don't confuse Ratio with Margin. 2x Ratio = 50% Margin. 3x Ratio = 66% Margin.
Core Concepts
The Multiplier
Price / Cost. A 3x multiplier means you sell for $30 what costs you $10 to make.
Keystone
A 2x multiplier (Doubling cost). This is the minimum survival standard for most inventory-based businesses.
Pricing Power
High multipliers (>5x) indicate strong brand equity or IP. Low multipliers (<2x) indicate a commodity business dependent on extreme efficiency.
What is Price-to-Cost Ratio Calculator?
This tool calculates the fundamental efficiency multiplier of a product. It translates the relationship between input cost and output value into a simple index.
Best For
- • Evaluating new product ideas.
- • Benchmarking against competitors.
- • Setting MSRP for a new brand.
Limitations
- • Ignores fixed costs.
- • Ignores sales volume (High ratio * Low vol = Low profit).
Alternative Methods
Margin Calculator
Percentage based view.
Break-Even
Volume based view.
Industry Applications
See how this methodology generates real revenue uplift in different sectors.
Perfume Brand
Pricing a new fragrance.
Cost of liquid + bottle was $5. Market price $100.
Hardware Startup
Priced at 2x cost ($200 cost, $400 price).
Retailers wanted 40% margin. Distributors wanted 20%.