Break-even price calculator
Find the exact price where profit hits zero after every fee, and the price you need for a target margin. Solved iteratively, because percentage fees move with price.
Below this you lose money on every sale. You are currently $20.00 above it.
The line bends because percentage fees grow with the price.
| Step | Working | Result |
|---|---|---|
| Selling price | $40.00 | |
| Marketplace commission | 40.00 × 15% | -$6.00 |
| Fulfilment | -$5.00 | |
| Cost of goods | -$12.00 | |
| Net profit per unit | 40.00 − 23.00 | $17.00 |
| Net marginMargin is measured against net revenue, so it stays comparable across tax regimes. | 17.00 ÷ 40.00 × 100 | 42.5 % |
Why you cannot just add up your costs
The intuitive break-even price is the sum of your costs. It is wrong, and it is wrong in a direction that loses money, because a large part of what a sale costs is a percentage of the sale. Raise the price to cover your costs and the referral fee rises with it, which means the price no longer covers your costs, which means you raise it again. The sequence converges, but not at the number you first thought of.
This calculator solves it iteratively, converging on the exact point where profit is zero rather than approximating it. On a marketplace taking around 15% plus a fulfilment fee, roughly a fifth of every price increase leaves again before you see it — so covering a $2 cost increase takes about $2.50 of price, not $2.
The same arithmetic in reverse, on a price cut
The mechanism that makes cost increases expensive makes price cuts worse than they look. Drop your price by 10% to match a competitor and you do not lose 10% of your profit; you lose 10% of your revenue out of a margin that was a fraction of it. On a product with a 20% net margin, a 10% price cut removes half the profit, and the volume increase needed to stand still is far larger than most sellers estimate before doing the arithmetic.
Which is why the useful output here is not one number but two: the floor below which you are losing money, and the price that produces the margin you actually want. The gap between them is your negotiating room, and knowing it before a promotion is what stops a discount from being a donation.
Questions people ask about this
Answers written from the published rules, not from other people's summaries of them. Every figure quoted below is listed with its source at the foot of this page.
Every formula on this siteHow do you calculate a break-even price?
You cannot simply add your costs, because the percentage fees change as the price changes — a higher price means a higher referral fee, which means you need a higher price again. This calculator solves it iteratively, converging on the exact point where profit is zero.
Why is my break-even price higher than my costs?
Because a chunk of the price leaves before you see it. On a marketplace taking 15% plus a fulfilment fee, roughly a fifth of every price increase goes straight back out. That is why cutting price to match a competitor rarely works out the way the spreadsheet suggests.
Should break-even include fixed costs or only variable ones?
Variable costs give you the contribution break-even — the price at which each additional unit stops losing money — and that is the right number for a pricing decision on one product. Fixed costs give you the volume break-even: how many units at that contribution are needed to cover the overhead. Both are useful and they answer different questions. Mixing them by spreading overhead across an assumed volume produces a break-even price that changes whenever your sales forecast does, which makes it useless as a floor.
Does the break-even price change when my order quantity changes?
Yes, usually more than sellers expect. Landed cost per unit falls with order size because the fixed parts — customs entry, brokerage, the inland leg, inspection — do not scale, and supplier price breaks compound that. A break-even calculated on a 200-piece trial order will be materially higher than the one for a 2,000-piece reorder, so pricing a product off its sample-run economics tends to price it out of the market it was meant for.
How should I handle returns in a break-even price?
As a probability-weighted cost on every unit sold, not as an occasional event. If one unit in twelve comes back and you recover nothing, every sale carries about 8% of a unit's cost plus the outbound and return freight. Categories with high return rates — apparel and footwear above all — can have a break-even price 15 to 20% above what the fee stack alone suggests, which is why an apparel business modelled on marketplace fees only looks profitable and is not.
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Where these numbers come from
This calculator uses arithmetic rather than published rates — every figure comes from the values you enter. See the methodology page for the formulas behind it.
Page updated . Spotted something out of date? Tell us — corrections are published with the date they were made.
More on the working: every formula on this site, the full source register, what the terms mean, and how we decide what to publish. What an estimate here can and cannot support is set out in the accuracy notes.