Selling Price Calculator
Use this price calculator to determine the required selling price of an item in an online marketplace so that you achieve your desired profit. Target profit or return can be set to a profit in dollars, a margin percentage or a markup percentage.
This calculator will be most useful for merchants that have costs associated with a per transaction fee when selling items through an online marketplace such as Etsy, eBay or Amazon and using a credit card processing service like PayPal to process payments. If you are using an ecommerce platform service that charges a monthly fee instead of a per transaction fee you'll need to forecast your sales and how that fee is distributed on a per item cost basis then enter that amount under fixed selling fees.
- Gross Profit; The amount of money earned after Cost has been paid. Gross Profit = Revenue - Cost. Revenue is amount received from the buyer less the Taxes.
- Gross Profit Margin; A percentage expressed as a ratio of gross profit to the revenue. Gross Profit Margin = Gross Profit / Revenue.
- The percentage applied to Costs incurred to produce and distribute the item. That result is then added to your total costs to set your selling price. Cost × (1 + Markup) = Selling Price and therefore, Markup = (Selling Price / Cost) - 1
- Expense incurred to produce and distribute the item. Total Cost = Item Cost + Shipping Cost + Selling Cost + Transaction Cost.
- Item Cost
- The Cost to acquire the item and might also include variable costs such as your additional production time and packaging rolled into it. For an Etsy craft product the Item Cost would also include your cost of materials and labor.
- Shipping Cost
- The amount the seller has to pay for shipping the product to the buyer.
- Shipping Charge
- The amount the seller charges the buyer for shipping. If you offer free or discounted shipping enter $0 or the discounted amount and the net shipping cost, if any, will be calculated into the Selling Price.
- Sales Tax
- Percentage charged on Item Price. Can also be charged on shipping.
- Charge Sales Tax on Shipping?
- Whether or not sales tax is charged on shipping varies from state to state. Check the policies of your marketplace provider regarding how they apply sales tax.
- Selling Fees
- This includes the fee of 5%, 10%, 15% or more that the marketplace (Amazon, eBay, Etsy, etc.) charges you once your item is sold. This fee is a percentage charged on Item Price and Shipping. Additional fixed costs such as an insurance or listing fee per item are also applied here. Etsy calls this fee the transaction fee. If you pay additional selling fees you can add them to these amounts.
- Transaction Fees
- Transaction or Payment Processing fees are the percentage (usually 2.2% to 3%) charged on the total transaction including Item Price, Shipping and Tax for processing a credit card payment. Additional per transaction payment processing fixed fees can include charges such as the $0.30 fee charged by PayPal or $0.25 charged by Etsy.
- Selling Price
- The calculator answer is the item price you should list for your item in order to meet your target return. You can set your target return to a Profit amount, a Margin percent or a Markup percent.