Need Help w/ finding Sales Price to give desired profit after fees, taxes, etc

pdp222

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Jun 23, 2018
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Hello!

I am an solo entrepreneur in dire need of some help. I am creating an excel sheet for my online stores. The idea behind this sheet is that I can quickly determine what price I need to charge customers to turn a profit, and that I can change that profit number to whatever I want, and the rest will figure itself out. The problem is... I can't determine the numbers (as I am no good at this sort of thing). I have posted the known variables below:

Final Sale Price = Unknown
Transaction Fee = 5% Final Sale Price + $0.25
Payment Processing Fee = 3.5% of Final Sale Price + $0.20
Production Cost = $15
Additional Fees = $1.20 (This variable is NOT a percentage of anything,for anyone wondering)
Estimated Profits = Final Sale Price (Unknown) - Production Cost ($15) - Additional Fees($1.20) - Transaction Fee(5% Final Sale Price+ $0.25 - Payment Processing Fee (3.5% of Final Sale Price + $0.20)
Taxes = 15.3% of Estimated Profits (What's left over after all the other fees have been paid)
Final Profit = $5

Let me know if there are any questions. I will do my best to clarify what I can, but as far as the math goes, it's too complex for me and I could really use the help with this.

Thanks!
 
Hello!

I am an solo entrepreneur in dire need of some help. I am creating an excel sheet for my online stores. The idea behind this sheet is that I can quickly determine what price I need to charge customers to turn a profit, and that I can change that profit number to whatever I want, and the rest will figure itself out. The problem is... I can't determine the numbers (as I am no good at this sort of thing). I have posted the known variables below:

Final Sale Price = Unknown
Transaction Fee = 5% Final Sale Price + $0.25
Payment Processing Fee = 3.5% of Final Sale Price + $0.20
Production Cost = $15
Additional Fees = $1.20 (This variable is NOT a percentage of anything,for anyone wondering)
Estimated Profits = Final Sale Price (Unknown) - Production Cost ($15) - Additional Fees($1.20) - Transaction Fee(5% Final Sale Price+ $0.25 - Payment Processing Fee (3.5% of Final Sale Price + $0.20)
Taxes = 15.3% of Estimated Profits (What's left over after all the other fees have been paid)
Final Profit = $5

Let me know if there are any questions. I will do my best to clarify what I can, but as far as the math goes, it's too complex for me and I could really use the help with this.

Thanks!
You appear to be selling a single item. Is your cost of the item of no consequence? OR is that the Production Cost = $15.00?

Why is it "Estimated" Profits? Doesn't your plan actually work? Maybe you just mean "Before Tax Profits"?

You seem to have it. Now, do the algebra.

EP = Estimated Profits

EP - 15.3%*EP = $5.00 - (1 - .153)*EP = 0.847*EP = $5.00 ==> EP = $5.9031877214 -- You'll have to decide what to do with the rounding.

Okay, now you know EP. Do the same thing with the Final Sale Price (FSP).

5.91 = FSP - $15 - $1.20 - 5%*FSP + $0.25 - 3.5%*FSP + $0.20

That looks like it can be done. Let's see your best algebra.
 
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You appear to be selling a single item. It your cost of the item of no consequence? OR is that the Production Cost = $15.00?

Why is it "Estimated" Profits? Doesn't your plan actually work? Maybe you just mean "Before Tax Profits"?

You seem to have it. Now, do the algebra.

EP = Estimated Profits

EP - 15.3%*EP = $5.00 = (1 - .153)*EP = 0.847*EP = $5.00 ==> EP = $5.9031877214 -- You'll have to decide what to do with the rounding.

Okay, now you know EP. Do the same thing with the Final Sale Price (FSP).

5.91 = FSP - $15 - $1.20 - 5%*FSP + $0.25 - 3.5%*FSP + $0.20

That looks like it can be done. Let's see your best algebra.

Thanks for the response!

Yes, Estimated Profits means before Taxes. The production price will change by product, I'm just more interested in finding the equation to input into the calculator. The rounding would just be to the... hundredth place, so $5.90 at that point... or is it $5.91?

So the 5 dollars would be from the final profit for that equation?

So then 5.91 = FSP - $15 - $1.20 - 5%*FSP + $0.25 - 3.5%*FSP + $0.20

So would FSP = (5.91*1.153) - (5.91*0.847) + 5.91 = 7.71 ?
 
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So then 5.91 = FSP - $15 - $1.20 - 5%*FSP + $0.25 - 3.5%*FSP + $0.20

So would FSP = (5.91*1.153) - (5.91*0.847) + 5.91 = 7.71 ?
NO.

FSP - 15 - 1.20 - .05FSP + .25 - .035FSP + .20 = 5.91

FSP(1 - .05 - .035) = 5.91 + 15 + 1.20 - .25 - .20

Continue...
 
NO.

FSP - 15 - 1.20 - .05FSP + .25 - .035FSP + .20 = 5.91

FSP(1 - .05 - .035) = 5.91 + 15 + 1.20 - .25 - .20

Continue...

Wait a second. I feel something crawling out of the recesses of my brain from high school algebra 2.....
This is one of those "opposites" equations. So I divide then?


FSP(1 - .05 - .035) = 5.91 + 15 + 1.20 - .25 - .20
(1 -.05 -.035) = (1 -.05 -.035)

FSP = 5.91 + 15 + 1.20 - .25 - .20
FSP = (1 -.05 -.035)

FSP = 21.66
FSP = 0.6

FSP = 36.10


For some reason this doesnt seem right. But I don't do math very well. Is this right?
 
1 - .05 - .035 = .915, not .6

Oops haha.

Ok so, I think I have it figured out. But I wasnt too sure with how the formula for the EP went from what TKhunny posted, but I tinkered around for a couple hours and go this (though I have no idea WHY it works):

EP = $5.00+(1*(1-0.153)))/(1-0.153)-1)

What that results to is $5.90. I went over to the .... millionth place and the back decimals are all 11 steps higher up than they are with TKhunny's calculations. Does this matter? Do I have it right still?
My other question is if there is a way to simplify that equation?

Here's all the formulas as they stand:

Desired Final (After Taxes) Profit = $5.00
Print Cost = $15.00
Additional Fees = $1.20
Transaction Fee = 5% of Final Sale Price plus 25 cents
Payment Processing Fee: 3.5% of Final Sale Price plus 20 cents
Estimated (Pre Tax) Profit = $5.00+(1*(1-0.153)))/(1-0.153)-1)
Final Sale Price = 21.66/0.915 = 23.67 (although my excel calculator is pulling it down to 23.66)


Is it right? Did I get it?

Thanks for the help again. I really need to get this figured out before the end of the month.
 
23.67 is correct...

Alright that makes sense. Now a new wrench is getting thrown in.

Whenever I raise the desired profit from $5, extra coins get added in somewhere. So say I want to change my desired profit to $10, suddenly an extra 90 cents is on hand.

Print Cost:$15.00
Additional Fees: $1.20
Transaction Fee: $1.85
Payment Processing Fee:$1.32
Pre-Tax Profit: $11.81
Taxes Paid (15.3%): $1.81
Final Profit: $10.00
FINAL SALE PRICE: $32.09


So when I subtract it shows up: $32.09 - $15.00 - $1.20 - $1.85 - $1.32 = $12.72 (which does not equal $11.81)

There's 90 cents floating around. This happens again if final profit is $15, but now it's $1.80 extra, and so on and so on. It's so close to being solved! But this is the last wrench, because I need to be able to change my desired profit without this happening. Any help on this anomaly would be great!
 
Alright that makes sense. Now a new wrench is getting thrown in.

Whenever I raise the desired profit from $5, extra coins get added in somewhere. So say I want to change my desired profit to $10, suddenly an extra 90 cents is on hand.

Print Cost:$15.00
Additional Fees: $1.20
Transaction Fee: $1.85
Payment Processing Fee:$1.32
Pre-Tax Profit: $11.81
Taxes Paid (15.3%): $1.81
Final Profit: $10.00
FINAL SALE PRICE: $32.09


So when I subtract it shows up: $32.09 - $15.00 - $1.20 - $1.85 - $1.32 = $12.72 (which does not equal $11.81)

There's 90 cents floating around. This happens again if final profit is $15, but now it's $1.80 extra, and so on and so on. It's so close to being solved! But this is the last wrench, because I need to be able to change my desired profit without this happening. Any help on this anomaly would be great!
This is why we invented spreadsheets.
 
e = expenses = 15.00 + 1.20 + 1.85 + 1.32 = 19.37
t = tax rate(15.3%) = .153
p = profit = 10.00
u = selling price = ?

Formula:
u = (p + e(1 - t)) / (1 - t)
u = (10.00 + 19.37(1 - .153)) / (1 - .153) = 31.18

u : 31.18
e :-19.37
-----------
- : 11.81 (before tax)
- : -1.81 (tax: 11.81 * .153)
----------
p : 10.00
 
Hello!

I am an solo entrepreneur in dire need of some help. I am creating an excel sheet for my online stores. The idea behind this sheet is that I can quickly determine what price I need to charge customers to turn a profit, and that I can change that profit number to whatever I want, and the rest will figure itself out. The problem is... I can't determine the numbers (as I am no good at this sort of thing). I have posted the known variables below:

Final Sale Price = Unknown
Transaction Fee = 5% Final Sale Price + $0.25
Payment Processing Fee = 3.5% of Final Sale Price + $0.20
Production Cost = $15
Additional Fees = $1.20 (This variable is NOT a percentage of anything,for anyone wondering)
Estimated Profits = Final Sale Price (Unknown) - Production Cost ($15) - Additional Fees($1.20) - Transaction Fee(5% Final Sale Price+ $0.25 - Payment Processing Fee (3.5% of Final Sale Price + $0.20)
Taxes = 15.3% of Estimated Profits (What's left over after all the other fees have been paid)
Final Profit = $5

Let me know if there are any questions. I will do my best to clarify what I can, but as far as the math goes, it's too complex for me and I could really use the help with this.

Thanks!

Divide you costs into three parts (for each item you sell):
fixed costs = fc = Production Costs + 0.25 + 0.20 + 1.20 = PC + 1.65
variable costs = vc = 0.035 * Final sales Price + 0.05 * Final sales Price = 0.085 FSP
tax = tx = 0.153 * Estimated Profit = 0.153 EP
Now
EP = FSP - fc - vc = FSP - fc - 0.085 FSP = 0.915 FSP - fc
Profit = EP - 0.153 EP = 0.847 EP = 0.847 ( 0.915 FSP - fc)
Solve for FSP

FSP = (Profit/0.847 + PC + 1.65) / 0.915

Spread sheet Put in Profit & Production Costs

EDIT: BTW : Same as Denis.
 
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