Pricing with Marketplace Fees
Marketplace fees are a share of the final price, so adding them to your price at the end never quite covers them. Work the price backwards instead: find the price that, after the fee percentage and the fixed fee per sale, still leaves your margin.
Why adding the fee at the end falls short
If you add a 9.5% fee to an $11.99 price, the fee is then charged on the higher price too, and the extra is never covered. The fixed fee per sale makes the gap bigger on cheap items.
Work the price backwards
The candle costs $7.94 and sells direct for $11.99 at a 30% margin. On a marketplace that takes 9.5% plus $0.45 a sale, the price that keeps a 30% margin is $13.99: $1.78 goes to fees, $7.94 covers the costs, and you keep $4.27.
The calculator does this step for you: type the fees wherever you sell takes, and the price is worked out with the fees inside.
Your minimum price on a marketplace
The fees also raise your floor. Covering only the costs, with no profit, the candle needs $7.94 sold direct but $9.28 on that marketplace. Below that, every sale costs you money.
Questions
Should I charge the same price everywhere I sell?
Not if the fees differ. A price that pays you well at a craft fair can leave little on a marketplace. Work out a price for each channel, or one price that works on the most expensive channel.
How do I include free shipping?
If you offer free shipping, the postage is a cost of the sale. Add it to your packaging cost per unit so the price covers it.
Where do I find the exact fees?
On your marketplace's own fee page or in your seller dashboard. Fees change, so check them when you set prices and type the ones your shop pays.
Keep reading
- How to Price Handmade ProductsThe full method for pricing handmade products: materials per unit, packaging, your time, fixed costs, marketplace fees and profit, with a worked example.
- Markup vs MarginA 30% markup is not a 30% margin. See the difference in dollars with a real example, and which one to use when you price what you make.
- Wholesale Pricing for Handmade ProductsHow to set a wholesale price for shops, cafés and resellers: a smaller margin than retail, never below your full cost per unit, with a worked example.