FREE TOOL · SHELF-BACK PRICING
CPG pricing calculator
Shelf-back pricing, run in both directions. Give it a target shelf price and it works backward through retailer, distributor, broker, trade, and freight to the maximum COGS your channel allows - or give it your COGS and it builds up to the shelf price you would need. The method comes from our guide to pricing a CPG product; channel presets use the typical ranges in the retail margins guide. Already have both numbers? The margin calculator runs the forward direction and shows the margin you actually keep.
YOUR NUMBERS
35% is the survival floor, 40-50% healthy - see margins guide
auto ≈ 5% of invoice · overwrite with your quote
ADVANCED · CHANNEL PERCENTAGES
Method: from the shelf, retailer cost = shelf price − retailer margin; your invoice price = retailer cost − distributor margin (where a distributor is used); net revenue = invoice price − broker commission − trade-spend reserve − freight; max COGS = net revenue × (1 − target gross margin). From COGS, net revenue needed = COGS ÷ (1 − target gross margin), and the same layers are added back to reach the required shelf price. Typical ranges and the ~35% survival floor come from the retail margins guide. Freight defaults to 5% of your invoice price - an outbound-logistics planning figure (food-industry transportation runs ~4.8% of sales per the Establish Davis survey; total CPG logistics ~7% per GMA/IBM) - and stops auto-updating once you enter your own number. All percentages here are margins on that layer's selling price, not markups on cost. Estimates, not advice - verify against your actual quotes and deductions.
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Frequently asked questions
What is shelf-back pricing?
Start from the price band your category actually transacts in on the shelf, then subtract each intermediary's margin - retailer, distributor, broker - plus a trade-spend reserve and freight to find your net revenue per unit. Only then do you judge whether your COGS can live inside what's left. It's the reverse of cost-plus, which regularly lands products outside the band shoppers accept.
How do I find my maximum COGS?
From your target shelf price, subtract retailer margin (30–45% by channel), distributor margin (20–30%), broker commission (3–5%, often 5–10% for emerging brands), a trade reserve (15–25% of gross), and freight for net revenue per unit. Max COGS is net revenue × (1 − target gross margin) - at a 40% target, 60% of net revenue. The common floor is ~35% gross margin, with healthy brands at 40–50%.
What shelf price does my COGS require?
Divide COGS by (1 − target gross margin) for the net revenue you need, add back freight, trade reserve, and broker commission for your required invoice price, then divide by (1 − distributor margin) and (1 − retailer margin) for the required shelf price. If that lands outside your category's band, it's a cost-structure problem, not a pricing problem.
This is the generic algebra. CPG Canary prices against your real shelf.
The full analysis pulls live competitor shelf prices in your category at run time, so the target price isn't a guess - then it computes this same waterfall deterministically against your actual COGS, channel by channel, as part of a full 16-agent analysis.
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