How does it work

Ask Me Anything Q&A Trueprofitaprilama

Topic summary

A user asks whether a pricing tool is an app, website, or subscription, and how it functions.

The response clarifies that TrueProfit is not a pricing calculator, but rather a profitability tracking tool. For pricing guidance, a common formula is provided:

  • Product Price = Cost × Markup
  • Typical DTC markup: 2.5x to 3x
  • Example: $15 COGS → $37.50-$45 retail price

This markup helps cover:

  • Product and fulfillment costs
  • Marketing and platform fees
  • Healthy margins (~60%) for reinvestment

TrueProfit’s actual function is real-time profitability tracking, monitoring COGS, ad spend, and net profit per order to identify margin issues quickly.

The question about tool format (app/website/subscription) remains unanswered.

Summarized with AI on October 29. AI used: claude-sonnet-4-5-20250929.
1

How does it work? Is it an app, website, subscription? Do you plug in numbers and it give you a price?

2

Hey @NurseCouture thanks for asking!

Your understanding is pretty close. To price your products for better conversions and long-term growth, there are a few proven formulas you can follow. One of the most common is:

  • Product Price = Cost x Markup

A typical markup used by many DTC business owners is around 2.5 to 3x. So for example, if your product costs $15 to make (COGS), your retail price might fall between $37.50 and $45, depending on your market positioning and competition.

Why 2.5x? That benchmark is popular because it helps you:

  • Cover your product and fulfillment costs (ingredients, packaging, shipping, etc.)

  • Absorb marketing and platform fees (ads, tools, Shopify)

  • Maintain a healthy margin (around 60%) to reinvest and grow

If you’re looking for tools to support pricing and track your business metrics, you might want to check out TrueProfit. It’s not a pricing calculator, but it helps you understand your real-time profitability by tracking:

  • COGS

  • Ad spend

  • Net profit per order

That way, you’ll always know exactly how much you’re really making—so if your margins shrink, you’ll see where the problem is and fix it fast.

Let me know if you’d like help exploring it further!