Assumptions
- Fees are assumed to be charged on the total the buyer pays, including tax. Marketplaces differ, so reconcile against a payout statement.
- Profit is calculated net of sales tax; the tax to remit is shown separately.
- Returns, promotional discounts, advertising and fulfilment or storage fees are not modelled.
- Inputs stay in your browser and are never stored or transmitted.
How it is calculated
- Sales tax is separated out of the selling price to give the net amount.
- Marketplace and payment fees are applied to the total the buyer pays.
- Cost, fees and the per-order cost are subtracted from the net amount to give profit per unit.
- Profit over the net price is the margin; profit over cost is the markup.
Examples
Common mistakes
- Fees vary by category. Look up the referral rate for the exact category you are listing in.
- Price in your return rate. Categories with frequent returns need that cost built into the unit profit.
- Advertising sits on top. Paid placement lowers the real margin further.
FAQ
What is the difference between margin and markup?
Margin is profit as a share of the selling price; markup is profit as a share of cost. Buy at $60 and sell at $100 and the $40 profit is a 40% margin but a 66.7% markup. A supplier saying "we add 50%" almost always means markup, and pricing as if that were margin quietly costs you money. This calculator always shows both.
What does the marketplace charge fees on?
Most marketplaces take their referral fee on the total the buyer pays, including shipping and tax where applicable, which is what this calculator assumes. Amazon adds fulfilment fees on top of the referral fee, Etsy charges a listing fee per item plus a transaction fee, and payment processing is usually a percentage plus a flat amount per order. Put the flat part into the cost per order field.
Why is sales tax not treated as profit?
Because it is collected on behalf of the tax authority, not earned. Profit is therefore calculated on the amount net of tax. The remittance is shown separately so you can see the cash that leaves your account. Reclaiming tax paid on purchases applies to VAT and GST systems; under US sales tax a reseller normally buys tax-free with a resale certificate instead, so leave that box unchecked.
What is the break-even price for?
It is the price at which profit is exactly zero after fees and per-order costs. Anything below it loses money on every sale, which makes it the floor for a promotion. Add your monthly fixed costs and the tool also tells you how many units clear rent and salaries.
Why does my payout differ from this?
Returns rarely refund the full commission, promotional discounts are often shared between seller and platform, and advertising is billed separately. Storage and fulfilment fees vary by size and season. This models one clean sale, so check overall profitability against a full month of payouts.
Is anything I type sent anywhere?
No. The whole calculation runs in this page and your costs never leave your device.