Pricing
How to Price for Profit After Fees
Short answer: Price = (product cost + shipping cost + other costs + target profit + fixed fees) ÷ (1 − percentage fee rate). For a $12 product, $4 label, $10 target profit and a 13.6% fee plus $0.40 per order, the price that leaves exactly $10 profit is $30.56.
The method
Start with everything that does not change with price: product cost, postage label, packaging and other per-order costs, your target profit, and any fixed per-order fee. Add them up. Then divide by one minus the percentage fee rate. Dividing — rather than just adding the fee percentage — accounts for the fee being charged on the final price itself, including on the part you added to cover the fee.
Worked example
Product cost $12.00, label $4.00, no other costs, target profit $10.00, fixed fee $0.40, percentage fee 13.6%. Numerator: $12.00 + $4.00 + $10.00 + $0.40 = $26.40. Denominator: 1 − 0.136 = 0.864. Price: $26.40 ÷ 0.864 = $30.56 (rounded). Check it: 13.6% of $30.56 = $4.16, plus $0.40 = $4.56 in fees. $30.56 − $12.00 − $4.00 − $4.56 = $10.00 profit, exactly the target.
Common pricing mistakes
Adding a flat markup to cost and forgetting the fee on the markup itself is the most common one — it leaves you short by the fee on the fee. Forgetting the fee on charged shipping is the second: the shipping amount the buyer pays is part of the fee base on most marketplaces. The third is pricing from the item price while offering free shipping, so the label comes out of a price that never included it. In that case put the label cost in the numerator and set shipping charged to zero in your fee base.
Adjusting for real life
Once the formula gives a price, sanity-check it three ways. First, compare it with similar sold listings — a mathematically perfect price nobody pays earns nothing. Second, add a return allowance if your category has steady returns: divide by (1 − fee rate − expected return rate) as a rough adjustment, or add an average return cost per order to the numerator. Third, round to a price buyers accept, then re-run the check: rounding $30.56 to $29.99 costs $0.57 of sale value and about $0.49 of profit after fees, so know what the rounding costs before you do it.
FAQs
Why do I need a pricing formula instead of guessing?
Because fees take a percentage of the price itself. Every dollar you add to the price also adds fee, so a guessed price that looks profitable can still leave less profit than you planned. The formula solves for the price that leaves exactly your target profit after fees.
What target profit should I aim for?
Enough to cover your time, returns and unsold stock, not just the item cost. Many sellers start with a target margin of 25% to 40% of the sale total and adjust once they know their real return rate and selling time.
Should fees on shipping change my shipping charge?
Yes, in the sense that shipping charged to the buyer is fee-bearing on most marketplaces. If you raise the shipping charge by $1, the fee rises too, so the extra dollar is not a full dollar of profit. Run the shipping charge through the same formula.
What if my marketplace fee is a flat amount, not a percentage?
Then add the flat fee to your costs in the numerator instead of the denominator. The formula only divides by (1 − fee rate) for percentage fees, because those grow with the price.
How often should I re-price?
Whenever a fee changes, your supplier cost moves, or your return rate shifts. A price set on last season's costs quietly loses margin as each of those moves.
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: Price to Profit Calculator, Break-Even Calculator, eBay Profit Calculator, Etsy Profit Margin 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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