How to price a product after fees (simple formula + examples)

Updated November 3, 2026 · 7 min read · Shopbook Studio

Most small sellers set prices by gut feel or by copying the cheapest listing they can find. Then marketplace fees, the shipping label and the packaging quietly eat the profit, and a "$30 sale" turns out to be worth $9.

The fix is to work backwards: start from the profit you want and let a formula give you the price. It takes two minutes per product, and you only need three numbers.

1. Add up your real cost per sale

This is everything that leaves your pocket when one unit sells, except the marketplace fee:

• Item cost: what you paid for the item, or the materials for a handmade product.
• Shipping: the label you pay for. If you offer "free shipping", this is a cost you have to build into the price.
• Packaging: mailers, boxes, tape, tissue, thank-you cards. Usually somewhere between $0.30 and $1.50 an order, and almost everyone forgets it.
• Other per-order costs: inserts, ads that only charge when you sell, anything else you spend on every order.

Add them up and you have one number: your costs per sale.

2. Find your marketplace fees

Almost every marketplace charges two kinds of fee: a percentage of the sale and a fixed amount per order. Typical US rates as of November 2026:

Fees vary by category and change from time to time, so check your marketplace's fee page before you price a big batch.

3. The pricing formula

Once you know your costs, your fees and the profit you want, this gives you the price:

Dividing by (1 − Fee %) is the important part. The marketplace takes its percentage from the final price, including the bit you added to cover the fee, so simply adding 13.6% on top always comes up short.

Example: an eBay item with free shipping

• Item cost: $12.00
• Shipping label: $5.50
• Packaging: $0.60
• eBay fees: 13.6% + $0.40 per order
• Profit you want: $10.00

Check it:

If you had just added your $10 to your costs and listed at $28.50, eBay would have taken $4.28 and you would have made $6.12: almost 40% less than you planned.

4. Pricing for a margin instead of a dollar amount

If you think in percentages ("I want 30% of every sale to be profit"), use this version:

The same eBay item with a 30% margin:

At $32.81 you keep $9.85, which is 30% of the sale. If the bottom of that formula gets close to zero or goes negative, the margin you want isn't possible at those fees: you need lower costs, a higher price point or a cheaper place to sell.

5. Etsy example: a handmade product

• Materials: $8.00
• Packaging: $1.00
• Shipping label (you offer free shipping): $4.50
• Etsy fees: 6.5% transaction + 3% processing = 9.5%, plus $0.25 processing + $0.20 listing = $0.45 fixed
• Profit you want: $12.00

If a sale comes through Etsy's Offsite Ads, another 15% of that order goes to Etsy (12% for shops that made more than $10,000 in the past year). If a lot of your orders come from those ads, price with the higher fee in mind.

For handmade work, also decide whether "profit" includes your time. If an item takes 30 minutes to make and you want $20 an hour, $10 of that $12 is really your wage.

6. Markup vs margin (they're not the same)

Markup compares profit to your cost. Margin compares profit to the price. A 50% markup is only a 33% margin, which is why sellers who "mark everything up 50%" are often surprised by how little they keep.

Both of these are before fees unless your costs already include them, which is exactly what the formula above does.

7. Pricing mistakes that cost the most

1. Adding the fee percentage on top instead of dividing. With a 13.6% fee this leaves almost 2% of every sale on the table.
2. Forgetting the fee on shipping. If a buyer pays $8 for shipping on eBay, about $1.09 of it goes to eBay.
3. Ignoring fixed fees on cheap items. $0.40 is 1% of a $40 sale but 5% of an $8 sale.
4. Forgetting packaging. $0.75 an order is $750 a year at 1,000 orders.
5. No room for returns. If 1 in 20 orders comes back and you lose the shipping both ways, add a little to every price to cover it.
6. Pricing once and never checking again. Fees and postage change. Re-check your best sellers every few months.

Do it in ten seconds

The free seller profit calculator does all of this for you: pick your marketplace, enter your costs, and it shows your profit, margin, break-even price and the price you need for your goal. It also runs the same sale through eBay, Etsy, Mercari, Poshmark, Depop and more, so you can see where you keep the most. Prefer Notion? The free Price Planner template does the same math for every item in one table.