Choose a target margin before setting the price
Cost-plus pricing adds a markup to product cost. Target-margin pricing works backwards from the share of revenue you want to retain after variable costs. The distinction matters because percentage-based marketplace and payment fees increase as the selling price increases.
Use a target-margin formula
When fees are a percentage of revenue and other costs are fixed per order, a simplified price formula is: fixed per-order costs ÷ (1 − percentage fee rate − target margin). For example, $18 in fixed costs, 12% percentage fees and a 25% target margin implies a price of about $28.57. This is an illustration, not a market recommendation.
The formula assumes the percentage fee rate applies to the full selling price and that fixed costs do not change with price. If fees also apply to shipping, tax, or other amounts, adjust the model to match the marketplace's rules.
Build a complete cost base
Include landed product cost, inbound freight, packaging, fulfilment, shipping subsidies, fixed payment charges, expected returns and advertising. Decide whether your target is contribution margin before overhead or net profit after allocated overhead. Do not compare those two measures as if they were identical.
Check the market and test scenarios
Compare the resulting price with competing offers, customer expectations and your product positioning. Test a range of conversion rates and advertising costs rather than assuming every price increase will preserve sales volume. A price that meets a margin target on paper can still be commercially unworkable if demand changes.
Review prices regularly
Revisit assumptions when supplier costs, carrier rates, exchange rates, advertising performance or marketplace fees change. Track realised profit by SKU and channel, not just the list price. Use the target selling price calculator to test your own costs and margin assumptions.