The delivery is on the floor, the invoice says ₱700 a bag, and you need a shelf price before the shop opens. You add 25% and write ₱875 on the tag.
It feels like a 25% margin. It is a 20% margin. In Lesson 05 you saw why: adding a percentage to cost is markup, and markup always overstates what you keep.
This lesson gives you the fix, one formula that turns the margin you want into the exact price you need: Price = Landed cost ÷ (1 − Target margin).
What Is Target Margin Pricing?
Choose the result first, then find the price that gets you there.
Target margin
The share of the selling price you want to keep as gross profit, for example 25% on dog food.
Set per category, not per mood
Landed cost
Supplier price plus your share of delivery, fees and handling, as in Lesson 03.
₱680 supplier price + ₱20 delivery share = ₱700
Shelf price
The price that delivers your target margin, rounded up to a clean number.
₱933.33 rounded up to ₱935
Pricing is not "cost plus something". It is "what price leaves me the margin I need?" Ask it that way and the formula follows.
The Target Margin Price Formula
Divide, do not multiply.
Why divide? If you want to keep 25% of the price, then your cost must be the other 75% of the price. So the price is cost ÷ 0.75. Multiplying by 1.25 answers a different question, which is why it falls short.
See It in Pesos: One Bag, Four Targets
The same ₱700 bag priced for different margins.
Shelf price for a ₱700 landed cost
| Target margin | Divide by | Exact price | Shelf price |
|---|---|---|---|
| 20% | 0.80 | ₱875.00 | ₱875 |
| 25% | 0.75 | ₱933.33 | ₱935 |
| 30% | 0.70 | ₱1,000.00 | ₱1,000 |
| 35% | 0.65 | ₱1,076.92 | ₱1,080 |
Shelf prices rounded up to the next ₱5. Example cost for illustration.
Cost + 25%
Target Margin 25%
On one product, selling 50 bags a month, the difference is ₱3,000 a month. Repeat the same mistake across every item in the shop and the gap can be bigger than your rent.
Pricing a Treat Jar, Step by Step
The same formula works for every product. Only the target changes.
Landed cost: ₱110 + ₱10 = ₱120
Divide by: 1 − 0.40 = 0.60
Price: ₱120 ÷ 0.60 = ₱200
Check: (₱200 − ₱120) ÷ ₱200 = 40%
Three Ways Prices Drift Below Target
Each one is small. Together they add up.
Rounding down
A few pesos per unit feels harmless. Across hundreds of units a month, it is real money. Round up.
Supplier price only
Pricing from the invoice price instead of landed cost puts you below target before the first sale.
Old prices
When a supplier raises prices and your tags stay the same, your margin shrinks every day you wait.
Reprice Your Shelves This Week
Start with the items you sell most.
Set your targets
Write one target margin for each category, for example food, litter, treats and accessories.
Update landed costs
Use your latest invoices, including delivery and fees, for your top 20 items.
Run the formula
Landed cost ÷ (1 − Target margin). Round up to a clean price.
Change the tags
Update shelf tags and your price list on the same day so they always match.
Copy this: repricing sheet
| Item | Landed cost | Target margin | Cost ÷ (1 − target) | Shelf price |
|---|---|---|---|---|
| ____ | ₱ ____ | ____ % | ₱ ____ | ₱ ____ |
| ____ | ₱ ____ | ____ % | ₱ ____ | ₱ ____ |
| ____ | ₱ ____ | ____ % | ₱ ____ | ₱ ____ |
Write the target as a decimal when you divide. 25% is 0.25.
A Good Price Starts With a Known Cost
The formula is only as accurate as the landed cost you put into it.
When stock comes from many suppliers, each with its own delivery fee and payment, working out the true landed cost of every item takes time. Many owners skip it, and their prices drift below target.
How Tail Stocks helps
Tail Stocks is a B2B wholesale marketplace for Philippine pet businesses. You buy from multiple suppliers in one place at their own wholesale prices, with no markup, with one order, one delivery and one payment.
One consolidated delivery means fewer separate fees to spread across your items, which makes your landed cost, and your shelf price, easier to get right.
Key Takeaways
- Price = Landed cost ÷ (1 − Target margin).
- Adding 25% to cost gives a 20% margin, not 25%.
- Start from landed cost, never from the supplier price alone.
- Round up to a clean shelf price, never down.
- Reprice whenever your costs change.
You now have a pricing rule that lands on your target every time, for every product, with one division.
Next lesson: why your dog food and your chew toys should not have the same target at all.
Price with confidence from the first order
Buy from multiple pet suppliers in one place, at their own wholesale prices.
Create your Tail Stocks account
The delivery is on the floor, the invoice says ₱700 a bag, and you need a shelf price before the shop opens. You add 25% and write ₱875 on the tag.
It feels like a 25% margin. It is a 20% margin. In Lesson 05 you saw why: adding a percentage to cost is markup, and markup always overstates what you keep.
This lesson gives you the fix, one formula that turns the margin you want into the exact price you need: Price = Landed cost ÷ (1 − Target margin).
What Is Target Margin Pricing?
Choose the result first, then find the price that gets you there.
Target margin
The share of the selling price you want to keep as gross profit, for example 25% on dog food.
Set per category, not per mood
Landed cost
Supplier price plus your share of delivery, fees and handling, as in Lesson 03.
₱680 supplier price + ₱20 delivery share = ₱700
Shelf price
The price that delivers your target margin, rounded up to a clean number.
₱933.33 rounded up to ₱935
Pricing is not "cost plus something". It is "what price leaves me the margin I need?" Ask it that way and the formula follows.
The Target Margin Price Formula
Divide, do not multiply.
Why divide? If you want to keep 25% of the price, then your cost must be the other 75% of the price. So the price is cost ÷ 0.75. Multiplying by 1.25 answers a different question, which is why it falls short.
See It in Pesos: One Bag, Four Targets
The same ₱700 bag priced for different margins.
Shelf price for a ₱700 landed cost
| Target margin | Divide by | Exact price | Shelf price |
|---|---|---|---|
| 20% | 0.80 | ₱875.00 | ₱875 |
| 25% | 0.75 | ₱933.33 | ₱935 |
| 30% | 0.70 | ₱1,000.00 | ₱1,000 |
| 35% | 0.65 | ₱1,076.92 | ₱1,080 |
Shelf prices rounded up to the next ₱5. Example cost for illustration.
Cost + 25%
Target Margin 25%
On one product, selling 50 bags a month, the difference is ₱3,000 a month. Repeat the same mistake across every item in the shop and the gap can be bigger than your rent.
Pricing a Treat Jar, Step by Step
The same formula works for every product. Only the target changes.
Landed cost: ₱110 + ₱10 = ₱120
Divide by: 1 − 0.40 = 0.60
Price: ₱120 ÷ 0.60 = ₱200
Check: (₱200 − ₱120) ÷ ₱200 = 40%
Three Ways Prices Drift Below Target
Each one is small. Together they add up.
Rounding down
A few pesos per unit feels harmless. Across hundreds of units a month, it is real money. Round up.
Supplier price only
Pricing from the invoice price instead of landed cost puts you below target before the first sale.
Old prices
When a supplier raises prices and your tags stay the same, your margin shrinks every day you wait.
Reprice Your Shelves This Week
Start with the items you sell most.
Set your targets
Write one target margin for each category, for example food, litter, treats and accessories.
Update landed costs
Use your latest invoices, including delivery and fees, for your top 20 items.
Run the formula
Landed cost ÷ (1 − Target margin). Round up to a clean price.
Change the tags
Update shelf tags and your price list on the same day so they always match.
Copy this: repricing sheet
| Item | Landed cost | Target margin | Cost ÷ (1 − target) | Shelf price |
|---|---|---|---|---|
| ____ | ₱ ____ | ____ % | ₱ ____ | ₱ ____ |
| ____ | ₱ ____ | ____ % | ₱ ____ | ₱ ____ |
| ____ | ₱ ____ | ____ % | ₱ ____ | ₱ ____ |
Write the target as a decimal when you divide. 25% is 0.25.
A Good Price Starts With a Known Cost
The formula is only as accurate as the landed cost you put into it.
When stock comes from many suppliers, each with its own delivery fee and payment, working out the true landed cost of every item takes time. Many owners skip it, and their prices drift below target.
How Tail Stocks helps
Tail Stocks is a B2B wholesale marketplace for Philippine pet businesses. You buy from multiple suppliers in one place at their own wholesale prices, with no markup, with one order, one delivery and one payment.
One consolidated delivery means fewer separate fees to spread across your items, which makes your landed cost, and your shelf price, easier to get right.
Key Takeaways
- Price = Landed cost ÷ (1 − Target margin).
- Adding 25% to cost gives a 20% margin, not 25%.
- Start from landed cost, never from the supplier price alone.
- Round up to a clean shelf price, never down.
- Reprice whenever your costs change.
You now have a pricing rule that lands on your target every time, for every product, with one division.
Next lesson: why your dog food and your chew toys should not have the same target at all.
Price with confidence from the first order
Buy from multiple pet suppliers in one place, at their own wholesale prices.
Create your Tail Stocks account