How to Price a Product for Amazon, eBay & Etsy (The Right Formula)

The instinctive way to price — add your target profit on top of costs — quietly fails on marketplaces, because the largest fees are percentages of the price you have not chosen yet. Raise the price to cover fees, and the fees rise with it. The fix is one division.

The formula

Price = fixed per-unit costs ÷ (1 − percentage fees − ad percentage − target margin)

Fixed costs are everything charged in dollars: landed product cost, fulfillment fee, packaging. Percentage items are everything charged on the price: referral or final value fees, and advertising budgeted as a share of revenue (TACOS).

Worked example

Landed cost $6.50, FBA fulfillment $4.25, other fees $0.50 → fixed = $11.25. Amazon referral 15%, ads 10%, target margin 25% → divide by (1 − 0.50) = 0.50. Required price: $22.50. Check it: referral $3.38 + ads $2.25 + fixed $11.25 = $16.88 in costs, leaving $5.62 — exactly 25%. Naive cost-plus at "25% on top" would have priced around $14 and lost money on every unit.

Three sanity checks before you commit

• Does the market bear it? If competitors sell at $18, your $22.50 needs a differentiation story — or your costs need to fall.
• Is the target possible? If percentage fees + ads + margin reach 100%, no price works. That is the math telling you the product fails.
• Did you price for ads? A price that only works at zero ad spend is a price that only works until you need customers. Check it against your break-even ACOS.

And keep margin and markup straight — the formula above uses margin, always.