Blog / Pricing
How to price a product so it earns a profit
A step-by-step method: add every cost, count fees against the price, then choose your margin.
Last reviewed 2026-11-11
Most under-priced products are not priced by guessing. They are priced by adding a mark-up to the purchase cost and stopping there. The fees, the returns and your own time never get counted.
The method
- List every cost per unit: the item, packaging, inbound freight, labour.
- List costs paid once per order separately, such as postage or setup.
- List the fees that are a share of the price: marketplace commission, card fees, delivery app commission.
- Choose the profit you want as a margin on the price.
- Solve for the price.
The formula
Price equals the fixed costs divided by one minus the percentage fees minus your margin. If your fixed costs are 20, fees are 5% of the price and you want a 25% margin, the price is 20 divided by 0.70, which is 28.57.
A mark-up of 25% on a cost of 20 would give 25. After the 5% fee, that sale leaves 3.75 profit. Priced at 28.57, the same product leaves 7.14. That gap is the reason to price from the fees, not from the cost alone.