New Product Viability Tool

When to use this tool

Reach for it when a new product lands on your desk — a brand launch, a supplier listing, a head‑office NPD request — and you need to know before saying yes whether it can meet your budgeted cost of sales, and what royalty or commission rate it would need to carry to get there.

Currency, tax & royalties

These live in the toolbar and work the same on every tool:

Currency

Pick your currency from the selector — it relabels the tax field to match your region.

Tax rate

Type your tax rate in the field beside the currency, or set it to 0 if you don’t want to factor in tax.

Royalties / commission

Optional. Switch on “Factor in royalties or commission” to open a panel where you set the rate with the slider (or type it exactly), rename it Royalty or Commission, and charge it on net or gross sales.

New product viability features

What you enter for this tool, and what it gives back:

New product details

The product’s name, its cost price (ex tax) and the proposed selling price (entered gross — tax is stripped automatically), plus an optional forecast of units sold per period so the verdict can show the cash impact as well as the percentages.

Cost of sales budget

Your target cost of sales as a % of net revenue — the benchmark the product is judged against. The budgeted gross profit % mirrors it automatically. Switch the budget off if you’d rather judge on a cash margin alone.

Margin required

An alternative benchmark: the margin you need per item, typed either as a % of net revenue or as cash — each recalculates the other from the product’s current price. When filled in, it overrides the cost of sales budget as the target (the panel tells you which is in charge).

Required royalty rate

The headline output: the maximum royalty or commission this product can carry and still hit your target — the number to take into a rate‑reduction request with a franchisor or platform.

Required selling price

The other lever: the price the product would need at your standard royalty rate. The price chart shows where gross profit crosses your budget, and the two sliders under it let you test prices and rates live.

Breakdown & verdict

Side‑by‑side revenue and cost splits at the proposed figures vs the fixed scenario, per‑unit and per‑period comparisons of the three ways it could run (as proposed, repriced, royalty reduced), and a plain‑English verdict.

Your data

These buttons sit in the “Your data” panel at the foot of the page and work the same on every tool:

Download template

Downloads a blank Excel template you can fill in offline.

Upload template

Reads a filled‑in template back in and fills the tool in one go.

Save scenario

Saves everything you’ve entered to a file you can back up or share.

Load scenario

Re‑opens a product you saved earlier.

PDF report

Generates a clean PDF of the analysis, ready to save, print or share.

Jargon buster

Contribution

Net revenue less cost of sales and any royalty or commission — what a sale adds before labour and overheads.

Cost of sales (C.O.S)

What the product costs you to make or buy — ingredients, packaging and waste — usually shown as a % of net revenue. Excludes labour and overheads.

Gross profit & %

Net revenue less cost of sales; the % expresses it as a share of net revenue — the mirror of cost‑of‑sales %.

Gross revenue

The total the customer pays, including tax.

Labour

The wage cost of the staff involved, usually shown as a cash figure or a % of net revenue.

Margin of safety

How far sales could fall before you stop making a profit — the cushion between your forecast and break‑even.

Net revenue

Gross revenue with tax removed — all the margin maths is worked on this figure.

Required royalty rate

The most this product can pay in royalty or commission and still make your budgeted gross profit.

Royalty / commission

A fee paid as a % of each sale, charged on net or gross. Optional — switch it on only if your business pays one.

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