You sell online courses. Each sale seems profitable, but are you accounting for all costs?

Scenario Without Overhead

Production cost per course: £25 (video editing, platform fees)

Selling price: £50

Profit: £25

Margin: 50%

Looks great! But wait...

Scenario With Realistic Overhead

Per-course costs you forgot:

• Payment processing (2.9% + £0.30): £1.75
• Email marketing platform (per student): £1.20
• Customer support (10 min @ £30/hr): £5.00
• Refunds (5% rate): £2.50
• Total overhead: £10.45

Let's round to £10 per course.

New calculation:

• Direct cost: £25
• Overhead: £10
• Total cost: £35
• Selling price: £50
• Profit: £15
• Margin: 30%

Your margin just dropped from 50% to 30% when you included real overhead.

The Revenue Illusion

Month 1: Ignoring overhead

• Sell 100 courses at £50
• Revenue: £5,000
• Costs: £2,500
• "Profit": £2,500 ✨

Month 1: Including overhead

• Sell 100 courses at £50
• Revenue: £5,000
• Direct costs: £2,500
• Overhead: £1,000
• Actual profit: £1,500 😬

You "lost" £1,000 because you forgot overhead.

Common Overhead Costs People Forget

Digital Products:

• Payment processing fees
• Platform/hosting fees
• Email marketing
• Customer support time
• Refunds and chargebacks
• Software subscriptions

Physical Products:

• Shipping materials
• Returns and damaged goods
• Inventory storage
• Quality control time
• Photos and listings
• Marketplace fees

Services:

• Proposal/quote time
• Client communication
• Invoicing and payments
• Professional insurance
• Software and tools
• Travel/commute

How to Fix It

1. Track everything for one month to find hidden costs

2. Calculate per-unit overhead (total overhead ÷ units sold)

3. Add it to your cost in pricing calculations

4. Review quarterly as costs change

The Bottom Line

If you price based only on direct costs, you're underpricing by 10-30%.

Use the calculator with realistic overhead to see your TRUE margin.