Price Builder is Vector's real-time margin engine. It nets your selling price against COGS and five pricing allowances: discount, shipping, financing, shrink, and returns, to calculate true profit per SKU. That number becomes your price floor, the line every customer generated offer and automated counter-offer gets measured against before it is accepted.
How Price Builder works
Most ecommerce margin math stops at one subtraction: selling price minus COGS. That number is gross margin, and it is fiction the moment a real transaction touches it, because almost no sale actually nets the full sticker price. A discount code takes a bite. Shipping is not free even when the customer does not see the charge. Financing options like Shop Pay Installments carry a fee. Shrink and returns quietly erase margin on products that never complete a clean sale cycle.
Price Builder treats each of those as a named allowance: a known, budgeted cost baked into the price itself, not a surprise discovered at month-end. Enter a SKU's COGS and current selling price, set your allowance percentages, and Price Builder returns a floor: the lowest price at which that SKU is still profitable once every real-world cost is accounted for. That floor updates the moment your COGS, freight rates, or discount policy changes. It is not a static spreadsheet formula. It is live.
Why it matters now
Customer generated offers only work if you know your floor before the customer makes an offer, not after. A merchant negotiating from gross margin will accept offers that lose money the moment shipping and financing costs are counted.
Agentic commerce raises the stakes further: AI shopping agents can submit offers in volume, faster than any human reviewer could sanity-check them one by one. A floor that lives in a spreadsheet updated quarterly cannot keep pace with a negotiation partner that does not sleep. Price Builder's floor is the mechanism that makes it safe to say yes automatically, to a person or to an agent, because the profitability check already happened before the offer arrived.
How Price Builder differs from a standard markup calculator
A keystone markup calculator, 2x cost or cost plus a fixed percentage, sets one price and stops. It does not know that a $40 item shipping to Alaska costs more to fulfill than the same item shipping to Ohio, or that 15% of a category's sales come back as returns while another category sees almost none. It also cannot answer a negotiation question in real time. It tells you what to charge, not what you can accept.
Price Builder is SKU-level and allowance-aware. Two products with identical COGS and identical list price can have completely different floors if one carries a higher return rate or ships heavier. And because the floor is a live number, not a static markup rule, it can answer a question a markup calculator was never built to answer: is this specific offer, right now, still profitable?
How to apply Price Builder to your store
- Enter your SKU's COGS and current selling price into Price Builder.
- Set your five allowances: discount, shipping, financing, shrink, and returns, as a percentage or dollar amount specific to that product or category.
- Use the resulting floor as the rule your customer generated offers and counter-offers negotiate against, instead of a manual approval process.
See the difference on your own numbers
The table below shows what changes when allowances are added to a standard gross-margin view. These are illustrative figures. The same math runs live against your actual catalog inside the tool.
| SKU example | Inventory volume | COGS | Current price | Gross margin | Price Builder floor | Profit difference |
|---|---|---|---|---|---|---|
| Low-volume, high-return category | 40 units | $22 | $60 | $38 (63%) | $41 | Gross margin overstates profit by $9.50/unit once returns and financing are counted |
| Mid-volume, standard category | 250 units | $15 | $35 | $20 (57%) | $23 | $3.20/unit gap: the difference between "profitable" and "actually profitable" at scale |
| High-volume, low-return category | 1,200 units | $8 | $19 | $11 (58%) | $12.10 | Small per-unit gap, but $1,320 in margin invisible to a standard markup view across the run |
FAQ
What are pricing allowances in Price Builder?
Allowances are the five real costs Price Builder nets against your selling price before calculating profit: discount rate, shipping cost, financing fees, shrink, and returns. Each can be set per SKU or per category, and together they turn gross margin into a true, negotiation-ready margin number.
How is the price floor different from a minimum advertised price (MAP)?
MAP protects brand pricing across retailers and is set for marketing reasons. The Price Builder floor is a profitability line, calculated from your actual costs. It can sit above, at, or below MAP depending on your allowances, and it is the number your offer engine checks, not the number customers see.
Does the floor update automatically if my COGS changes?
Yes. Because Price Builder is a live calculation rather than a static markup sheet, updating COGS, freight rates, or allowance percentages recalculates the floor immediately. Every open customer generated offer is evaluated against the current number, not a stale one.
How does Price Builder handle counter-offers?
When an incoming offer falls below the floor, Price Builder can trigger an automated counter, typically an incremental-unit or bundle counter rather than a straight price drop, that brings the deal back above the floor without manual review.
Will Price Builder work with AI shopping agents, not just human customers?
That is the direction the floor logic is built for. As agentic buyers submit offers programmatically, the same real-time floor check that governs human customer generated offers is what evaluates and responds to an agent's bid without a person in the loop for every transaction.
Can I set different allowances for different products?
Yes. Allowances are configurable at the SKU or category level, which is the main reason Price Builder outperforms a single storewide markup rule. A high-return category and a low-return category should never share the same floor logic.