Product Pricing Calculator
Find the selling price that covers all your costs and hits your profit target. Use this when launching a product on Amazon, Etsy, Shopify, or any marketplace where fees eat into margins.
About this calculator
Setting the right price means covering every cost layer before profit can exist. The formula works backward from your desired margin: Selling Price = (productCost + shippingCost + overhead) / (1 − desiredMargin/100 − marketplaceFee/100). The denominator accounts for the fact that both your profit margin and the marketplace fee are expressed as percentages of the final sale price, not your cost. If you only added a markup to cost, you'd underestimate how much the platform takes and end up with less profit than expected. Overhead allocation spreads fixed costs like software subscriptions or storage fees across each unit sold. Inputting accurate values for every field ensures the price you set is genuinely profitable, not just optimistically profitable.
How to use
Suppose a product costs $12, shipping is $3 per unit, overhead is $2, your desired margin is 25%, and the marketplace fee is 15%. Plug into the formula: Selling Price = (12 + 3 + 2) / (1 − 0.25 − 0.15) = 17 / 0.60 = $28.33. That means you must list the product at $28.33 or higher to achieve a 25% profit margin after the $4.25 marketplace fee. Rounding up to $28.99 gives you a small additional buffer without looking uncompetitive.
Frequently asked questions
How do I calculate a selling price that accounts for marketplace fees and profit margin together?
You cannot simply add a percentage markup to your cost because marketplace fees are also taken from the sale price, creating a compounding effect. The correct approach is to divide total costs by (1 minus your margin fraction minus the fee fraction). This ensures both deductions are applied to the final price simultaneously. Using this method prevents the common mistake of setting a price that looks profitable but actually falls short once fees are deducted.
What should I include in overhead allocation when pricing a product?
Overhead allocation covers fixed and semi-fixed business costs that aren't tied to a single unit but must be recovered across your sales volume. Common items include monthly software subscriptions, warehouse or storage fees, packaging materials, staff time, and returns processing costs. Divide your total monthly overhead by the number of units you expect to sell to get a per-unit figure. Failing to include overhead typically causes sellers to underprice products and wonder why they aren't profitable despite strong sales volume.
Why does a higher marketplace fee percentage require a much higher selling price?
Because marketplace fees are calculated on your selling price, a higher fee rate shrinks the denominator in the pricing formula more aggressively. For example, moving from a 10% to a 20% marketplace fee on a product with a 25% desired margin changes the denominator from 0.65 to 0.55, increasing the required price by roughly 18% even though the fee only rose by 10 percentage points. This non-linear relationship surprises many sellers who try to estimate pricing mentally. Always use the formula to see the true impact of fee changes before committing to a new channel.