Selling Price Calculator

Your target margin and your fees are percentages of the price, not of the cost. That single fact forces division instead of addition: price = cost ÷ (1 − (margin + fees) ÷ 100). A $100 cost with a 30% target margin comes to 100 ÷ 0.70 = $142.86. Check it and the logic closes: 30% of $142.86 is $42.86 of profit, and $142.86 − $42.86 is exactly the $100 you paid. Add a 5% payment fee and the divisor becomes 0.65, giving 100 ÷ 0.65 = $153.85. The quantity 1 − (margin + fees) is the divisor, and it is simply the share of the price that has to cover your cost. Everything else in this page is a consequence of that one line.

Add 30% to a $100 cost and you get $130. Now measure the margin you actually achieved: 30 ÷ 130 = 23.1%. You aimed at 30% and landed almost seven points low, on every unit, forever. The error is not constant — it grows with ambition. Target 20% and adding gets you 16.7%. Target 40% and you get 28.6%. Target 50% and you get 33.3%. Target 60% and you get 37.5%. The more margin you want, the more the additive method shortchanges you, which is exactly backwards from what you would hope. So the working rule is short: anything charged on the price goes in the divisor; only true cost goes in the numerator.

This is the second half of the same mistake. If you want a 30% margin and your card processor takes 5%, the answer is not "price for 35%" by tacking 5% onto $130. It is cost ÷ (1 − 0.35), which is 100 ÷ 0.65 = $153.85. The difference is real money: $153.85 versus the $136.50 an additive approach would produce, on the same $100 cost. At $136.50 the processor takes $6.83, leaving $29.67 of profit — a 21.7% margin instead of 30%. What belongs in the fees field is every percentage skimmed off the sale price: payment processing, marketplace or platform commission, affiliate payouts, sales commission if it is paid on revenue. What does not belong there is anything charged in flat dollars — a fixed per-transaction fee or a shipping label should be added to the cost side instead, because it does not scale with the price.

Margin plus fees must stay below 100%. At exactly 100% the divisor is zero and there is no price that works; above it the divisor goes negative and the formula returns nonsense. That is not a quirk of the arithmetic, it is the arithmetic telling you something true. If the percentages taken out of every sale add up to the entire sale, there is nothing left to pay for the product, no matter how high you set the price. Raising the price raises the fees in lockstep. Watch how steeply the price climbs as you approach the wall. On a $100 cost: 50% total gives $200, 75% gives $400, 90% gives $1,000, and 95% gives $2,000. Anywhere past roughly 70% combined, small changes to your assumptions swing the price violently — a sign to double-check the inputs rather than trust the output.

The formula is only as honest as the cost you feed it. Landed cost is the right figure: the supplier invoice plus inbound freight, import duties, packaging, and a realistic allowance for breakage and returns. Products priced off the invoice line alone are systematically underpriced by whatever those extras run. Also decide deliberately whether outbound shipping lives in the cost or is billed separately. Free shipping is not free; if you absorb it, it belongs in cost, and it belongs there at your average shipping cost across orders, not the cheapest one. Finally, treat the output as a floor, not a verdict. The divisor tells you the price that delivers your target margin — it says nothing about whether customers will pay it. If the number lands above what the market bears, the answer is to attack the cost, change the offer, or accept a thinner margin consciously, rather than to fudge the arithmetic. These figures are estimates for planning; confirm your actual processing and marketplace rates before committing to a price list.