How to use the pricing calculator
- Enter your total cost per unit — product, packaging, shipping, and any other expenses.
- Set the marketplace or payment gateway fee percentage you'll pay on the sale.
- Set your desired profit margin (profit ÷ selling price).
- Read the recommended selling price. It already accounts for the percentage fee.
Formula
Because the marketplace fee is a percentage of the selling price, you can't just add margin on top of cost. You have to solve for price:
This works only when fee % + margin % is less than 100. If they add up to 100% or more, no price can satisfy both — you'd need to lower one of them.
Worked example
Product cost ₹400, packaging + shipping ₹90, other ₹10, marketplace fee 15%, target margin 25%.
| Item | Value |
|---|---|
| Total cost | ₹500.00 |
| Marketplace fee | 15% |
| Target margin | 25% |
| Denominator (1 − 0.15 − 0.25) | 0.60 |
| Recommended price | ₹833.33 |
| Fees at that price | ₹125.00 |
| Profit at that price | ₹208.33 |
Frequently asked questions
Why is the recommended price higher than cost ÷ (1 − margin)?
Because the marketplace takes a percentage of the selling price, not the cost. Adding margin on top of cost ignores that the fee grows with the price too. The formula accounts for both.
What if fee % + margin % is 100% or more?
No finite price works. Every rupee of revenue would be eaten by fees and profit before costs are paid. Lower the fee or lower the target margin.
Does this include advertising cost?
Yes if you add it to "other expenses". Advertising per sale behaves like a cost and is best treated as one for pricing decisions.
Is the recommended price rounded?
It's shown to 2 decimal places. In practice, round up to a psychologically attractive price (e.g. ₹849 or ₹899) to keep a small buffer.