How to Price for Profit on Any Marketplace
Guide · 2026-10-17
Most sellers price by adding a percentage to cost. That approach fails because fees are not a fixed percentage of cost, they are a percentage of price plus fixed amounts.
The formula
price = (unit_cost + fixed_fees) / (1 - percentage_fees - target_margin)
Three inputs, and every marketplace differs only in the last two terms.
Reading the fee terms off each platform
| Platform | Percentage fees | Fixed fees |
|---|---|---|
| Etsy | 6.5% + 3% (+15% offsite ads) | $0.25 + $0.20 listing |
| eBay | 13.25% | $0.30 |
| Amazon FBA | 15% referral | Fulfillment fee (varies) |
| Shopify | 2.9% | $0.30 + plan/orders |
| Poshmark | 20% | $0 (flat $2.95 under $15) |
| TikTok Shop | ~6% + 2% | $0.30 |
A worked example across two platforms
Unit cost $8, fixed fees $0.45, target margin 40%.
On Etsy (9.5% percentage fees): price = (8 + 0.45) / (1 - 0.095 - 0.40) = $16.73.
On eBay (13.25%): price = (8 + 0.30) / (1 - 0.1325 - 0.40) = $17.76.
Same product, same target margin, $1.03 difference in the price you must charge. Sellers who use one price across platforms are silently accepting a lower margin on one of them.
Why target margin, not markup
Markup is a percentage of cost. Margin is a percentage of price. A 50% markup on an $8 item gives a $12 price and a 33% margin. Confusing the two is the single most common pricing error, and it gets worse as fees rise.
What the formula deliberately excludes
- Advertising. Treat ad spend as a separate budget line, then re-check that the contribution margin still covers it.
- Returns. Model a return rate and add its cost per unit sold, not per unit returned.
- Your time. If you are doing fulfilment yourself, the hourly cost belongs in fixed costs.
When to break the formula
Loss leaders, bundle anchors and clearance all justify pricing below the target margin. What is not justified is not knowing the number. Price below target deliberately, not by accident.