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 calculatorThree 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 m | price-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 margin | Price incl. VAT | Contribution 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.