What is Maximum Cost?

Maximum Cost represents the upper limit you should pay for a product to remain profitable according to your settings in ProductChimp.

It ensures that after accounting for all costs—like fees and VAT—you still hit your desired profit and return on investment (ROI).

Formula

Max Cost = Sale Price – Minimum Profit – Fees – VAT

If VAT applies, the Sale Price used in this formula is VAT-inclusive.

Where to Find Maximum Cost

Inside the ProductChimp Profit Calculator, the Maximum Cost is prominently displayed along with a full breakdown of:

• Sale Price
• Cost Price
• Fees
• Profit
• ROI
• Profit Margin

This allows you to instantly see how each component affects your profitability.

Understanding the Color Indicators

🟢 Green Maximum Cost

If the calculated Maximum Cost meets both your Minimum ROI and Minimum Profit targets, it will appear in green.

This indicates:

• The product meets your buying criteria
• The deal is potentially worth pursuing

🔴 Red Maximum Cost

If the numbers fall short of your targets, the Maximum Cost will appear in red.

This means:

• The current pricing does not meet your profitability goals
• You may need to negotiate a lower purchase price or skip the product

Example Breakdown

From the Profit Calculator:

• Sale Price: $17.99
• Cost Price: $5.00
• Fees: $8.63
• Profit: $4.36
• ROI: 87%
• Maximum Cost: $9.36

In this case, paying up to $9.36 would still meet the defined targets. Since the current cost ($5.00) is below this threshold, the product is considered profitable under the set criteria.

Supporting Metrics Explained

ROI (Return on Investment)

ROI = Profit ÷ Cost Price
Measures how efficiently your investment generates profit.

Profit Margin

Profit Margin = Profit ÷ Sale Price
Shows how much of your sale price turns into profit.

Key Takeaway

Maximum Cost acts as your buy/no-buy guardrail. While ProductChimp highlights whether a deal fits your criteria, the final purchasing decision is always yours.

FAQs

What happens if my Maximum Cost is lower than the supplier price?

This means the deal does not meet your profitability targets. You can either negotiate a lower cost or skip the product.

Can I change how Maximum Cost is calculated?

You can’t change the formula itself, but you can adjust your Minimum ROI and Minimum Profit in ProductChimp Settings, which directly affects the result.

Why is my Maximum Cost shown in red?

It appears in red when the product fails to meet your configured ROI and profit thresholds.

Does VAT always apply?

No. VAT is only included if it applies to your selling region. When applicable, calculations use a VAT-inclusive sale price.

Is Maximum Cost the same as my ideal purchase price?

Not exactly. It’s the highest acceptable price you can pay. Ideally, you want to source products below this number to maximize profit.

Should I always follow the Maximum Cost recommendation?

It’s a strong guideline, but not a rule. You can choose to proceed based on other factors like demand, competition, or long-term strategy.