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How to calculate your selling price from costs and target profit

Calculate the price backwards: decide what an order should leave you – a margin or an amount – and solve for the price. Because fees grow with the price and returns and VAT change what is left, a simple “purchase price × 2” misses the target. For the example product a 25% margin needs €46.26 including VAT.

Enter your costs and your target margin – the calculator solves for the price including VAT.

Open the profit calculator

Three ways to get to a price

All three start with the costs of one order and end with a price including VAT. Only the second and third reach a defined result.

1 Simple rule (cost-plus)purchase price × factor, plus VAT
2 Target margin mprice-independent costs ÷ ((1 − return rate) × (1 − m) ÷ (1 + VAT) − fee %)
3 Target profit per order(price-independent costs + profit) ÷ ((1 − return rate) ÷ (1 + VAT) − fee %)

Why “purchase price × 2” misses

Percentage fees, returns and VAT all move with the price, and shipping and advertising come on top. In the example, doubling the purchase price (€12.00) and adding VAT gives €28.56; at that price one order leaves -€1.98 (-9% margin). The price that reaches the 25% margin is €46.26.

Start from the result you need and let the fees, shipping, advertising and returns be part of the calculation instead of a surprise.

Table: price by target margin

Same product (purchase price €12.00, shipping €4.50, 15% marketplace fee, €3.00 ads, 10 % returns, 19 % VAT). The price is the price the customer pays, including VAT:

Target marginPrice incl. VATContribution per order
10%€36.37€2.75
20%€42.41€6.42
25%€46.26€8.75
30%€50.87€11.54
40%€63.53€19.22

Choosing the target

A margin is easiest to compare across products. An amount per order is easier when you know what an order must contribute to your fixed costs – see the contribution margin guide. Whichever you choose, compare the result with what comparable offers cost: if the market does not pay the price, the costs have to come down, not the margin.

Worked examples: Product with €12.00 purchase price on a marketplace

15% marketplace fee, shipping €4.50, €3.00 advertising per order, 10 % returns at €5.00, 19 % VAT. Example numbers, not data from a real shop.

Break-even price incl. VAT
€31.83
Price for 25% margin incl. VAT
€46.26
Price for €5.00 profit per order incl. VAT
€40.08
“Purchase price × 2” incl. VAT
€28.56
Contribution per order at that price
-€1.98

Set the target first, then solve for the price – the simple rule only works by accident.

Common mistakes and how to fix them

Adding a fixed percentage to the purchase price

Why it matters: Fees, returns, shipping and advertising are not in it, so the real margin can be far below the one you wanted.

Fix: Solve for the price with the full cost model, as the calculator does.

Mixing net and gross prices

Why it matters: If you charge VAT, it is not revenue. A margin on the gross price looks better than it is.

Fix: Calculate on the net price and add VAT at the end, or let the calculator show both.

Fixing the price before checking the market

Why it matters: A price the market does not pay sells nothing, however good the margin looks.

Fix: Compare with similar offers; if you are too expensive, look for costs to lower first.

Frequently asked questions

How do I calculate the selling price with VAT?

Solve for the net price that gives your target, then add VAT. The calculator shows the price including and excluding VAT.

Which margin should I aim for?

It depends on your fixed costs and category. Start from what an order must contribute to cover your fixed costs, then check whether the market pays that price.

Why is my price higher than purchase price × 2?

Fees and returns take a share of every price, and shipping and advertising are costs per order. The full calculation includes them.

Can I calculate the price for many products at once?

Yes: upload your product list as a CSV to the catalogue analysis; it shows the price for your target margin for every row.

Check your whole shop in 2 minutes – free

One product, a few numbers, no sign-up: see what really stays per order and what to do next.

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