Pricing
Break-Even Pricing Guide
Short answer: Break-even price = (product cost + shipping cost + other costs + fixed fees) ÷ (1 − percentage fee rate). For an $18 product with a $0.65 fixed fee and a 13.6% fee rate, the break-even price is $21.59 — sell below that and every order loses money.
The formula
Break-even price = (all fixed per-order costs + fixed per-order fees) ÷ (1 − percentage fee rate). Fixed per-order costs are the product, the postage label, packaging and any other cost that does not change with the selling price. The denominator handles the percentage fee: because the fee grows with the price, you must divide by what is left after the fee, not simply add the fee percentage to your costs.
Worked example
Product cost $18.00, no separate shipping or other costs in this example, fixed fee $0.65, percentage fee 13.6%. Numerator: $18.00 + $0.65 = $18.65. Denominator: 1 − 0.136 = 0.864. Break-even price: $18.65 ÷ 0.864 = $21.59 (rounded). Check it: 13.6% of $21.59 = $2.94, plus $0.65 = $3.59 in fees. $21.59 − $18.00 − $3.59 = $0.00 profit, which is exactly break-even, allowing for a fraction of a cent in rounding.
From break-even to a real price
Break-even is the floor. To set a selling price, add your target profit to the numerator before dividing: ($18.65 + $8.00 target profit) ÷ 0.864 = $30.84. Check: 13.6% of $30.84 = $4.19, plus $0.65 = $4.84 in fees, and $30.84 − $18.00 − $4.84 = $8.00 profit. If the resulting price looks too high against comparable sold listings, the honest options are a cheaper source, a lower-cost shipping method, or a different marketplace — not selling below break-even and hoping volume fixes it, because volume below break-even only multiplies the loss.
Break-even traps
The most common trap is leaving the label out when shipping is free: the label is a real cost even though the buyer pays nothing for shipping. The second is forgetting the fee on charged shipping, which raises the fee base. The third is treating a monthly subscription as free: spread it across expected monthly orders and add that share to the numerator, so a $21.95 monthly store fee across 50 orders adds about $0.44 per order to break-even.
FAQs
What is a break-even price?
The lowest price at which a sale covers all of its costs and leaves zero profit. Sell below it and every order loses money; sell above it and the difference is profit.
How is break-even different from a profitable price?
Break-even is the floor, not the goal. A profitable price adds your target profit to the same calculation. Price at break-even only if you have a deliberate reason, such as clearing dead stock.
Which costs belong in a break-even calculation?
Product cost, postage label, packaging and other per-order costs, plus every marketplace fee the sale triggers, including fixed per-order fees and percentage fees. Leave out monthly costs like a store subscription, or spread a per-order share of them into the calculation.
Why do percentage fees make break-even higher than cost plus fixed fees?
Because the fee is charged on the final price, so raising the price to cover costs also raises the fee. The formula divides by (1 − fee rate) to account for that loop.
What if I offer free shipping?
Then the label cost is a cost with no offsetting shipping revenue. Put the full label cost in the numerator and use only the item price as the fee base, which is what the formula below does when shipping charged is zero.
Stand: October 2026.
Fee figures in the example use eBay's published non-Store rate as an illustration. Source: eBay Help — Selling fees. Replace the rate with your own marketplace's rate before pricing.
Try it with your own numbers: Break-Even Calculator, Price to Profit Calculator, eBay Profit Calculator.
Disclaimer: Results are estimates and general information only, not tax or financial advice. Fees change, so confirm the current rate on the platform before you price a listing.
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