How this calculator works
A margin is the share of the selling price you keep after costs. Because both your margin and your percentage fees are shares of that price, the price has to be solved for rather than marked up.
Enter your cost and the margin you are aiming at, and this works backwards to the price — including the fees that come off the top.
The formula
- Selling price = (unit cost + fixed fee) ÷ (1 − target margin − fee %)
- Profit = selling price − unit cost − fees
- Margin = profit ÷ selling price
- Equivalent markup = margin ÷ (1 − margin)
What to watch for
- The price is divided, not multiplied. Both the margin and the percentage fees are shares of the final price, which is the unknown you are solving for.
- Your target margin and your fee rate must add up to less than 100%. A 70% margin on a channel taking 35% is not ambitious, it is unsolvable — and the calculator will say so rather than return a number.
- A fixed per-sale fee matters most on cheap items. Twenty cents on a $4 product is 5% of the price; on a $60 product it is nothing.
- Margins below about 10% leave nothing for discounts, returns, breakage, or a slow month.
Common mistakes
- Multiplying cost by one plus the margin, which computes a markup and always undershoots.
- Forgetting that fees come off the price, so they must be inside the equation rather than added afterwards.
- Using material cost instead of full unit cost, which leaves labour and overhead unfunded.
- Setting the same margin for every channel when the fees differ by ten percentage points.
Frequently asked questions
How do I calculate the price for a target margin?
Divide your cost by one minus the margin. For a 40% margin on a $10 cost, that is $10 ÷ 0.60 = $16.67. If you also pay percentage selling fees, subtract those from the denominator too: at 40% margin and 9.5% fees, $10 ÷ 0.505 = $19.80.
What is a good profit margin for a handmade business?
Many makers target 30% to 50% on retail sales and 25% to 40% on wholesale. The right number is whatever covers reinvestment, discounts, returns, mistakes and slow periods in your business. Test a few and look at the profit in cash, not just the percentage.
Why does the calculator refuse some margins?
Because they are impossible. If your target margin plus your percentage fees reach 100%, there is no price at which both can be satisfied — the equation has no solution. Rather than return a very large or nonsensical number, the calculator explains what is wrong.
Is margin calculated before or after selling fees?
Here it is after. The margin you see is what you actually keep once the marketplace and payment processor have taken their share, which is the number that matters. Some tools quote margin before fees, which flatters the result by several percentage points.