Free tool
Skincare profit margin & pricing calculator
Enter your landed cost, retail price and the real costs of fulfilling an order to see your gross margin, net profit per order and the return on ad spend you need to stay profitable. All figures are in Australian dollars.
Gross margin is retail price minus landed cost, divided by retail price. Australian skincare brands typically target 70–80% gross margin so that shipping, payment fees and advertising still leave a net profit. Use the calculator below to check your own numbers.
Formulation, filling, packaging and label.
Enter your net cost after any shipping the customer pays.
Percentage of order value.
Percentage of orders.
- Net revenue per order (ex GST)
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- Gross profit per order
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- Gross margin
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- Contribution after fulfilment & fees
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- Break-even ROAS
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- Max you can pay per customer
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- Net profit per order
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Estimates only, and they exclude fixed overheads such as software, wages and rent. Nothing here is financial or tax advice — confirm GST treatment with your accountant.
Gross margin is not profit
Gross margin only accounts for what the product costs to make. The orders that quietly lose money are the ones where shipping, payment fees, returns and advertising eat the whole gross profit. Net profit per order is the number that decides whether you can afford to scale.
If you are GST registered, your advertised price includes 10% GST that you remit to the ATO. Always model margin on the ex-GST revenue, not the sticker price.
Break-even ROAS explained
Break-even return on ad spend is order value divided by contribution per order — the point where advertising exactly pays for itself. If your break-even ROAS is 2.5x, every dollar of ads must return $2.50 in sales before you make a cent.
Two levers move it: raise average order value (bundles, sets, subscriptions) or lower fulfilment cost. Discounting does the opposite and usually pushes break-even ROAS out of reach.
- Bundle two products to spread shipping and acquisition cost across a larger order.
- Set free shipping above a threshold that lifts average order value.
- Build repeat purchase so the second order carries no acquisition cost.
What margin should an Australian skincare brand target?
As a working benchmark, target at least 70% gross margin direct-to-consumer and no less than 50% if you intend to wholesale, because retailers typically buy at half of recommended retail. Price for both channels from the start — it is far harder to raise prices later than to launch at the right number.
Frequently asked questions
What is a good profit margin for skincare products in Australia?
A 70–80% gross margin is the common target for Australian direct-to-consumer skincare. That leaves enough room for shipping, payment fees and advertising to still produce a net profit per order.
How do I price my skincare product?
Start from your landed cost per unit and divide by one minus your target margin. At an $11 landed cost and a 75% target margin, retail is $44. Then check the price against comparable Australian brands and your positioning.
What is break-even ROAS?
Break-even ROAS is the return on ad spend where advertising exactly covers itself. It equals order value divided by your contribution per order after cost of goods, shipping, fees and returns.
Should I include GST in my margin calculations?
If you are registered for GST, remove the 10% from your retail price before calculating margin, because that portion is remitted to the ATO and was never your revenue.
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