The Complete Guide to Pricing a Product for Your Target Margin
By Arshi Khan, Founder of Just4Marketing · Last reviewed October 2026
Most marketplace and payment fees are charged as a percentage of the selling price, which means raising your price also raises your fees. That's why simply adding your desired margin on top of cost always comes out too low. This guide shows the formula that accounts for percentage fees, and how to set a list price that still protects your margin during a sale.
The formula
Selling price = (product cost + shipping + fixed fees) ÷ (1 − target margin − percentage fees). The target margin and percentage fees together must stay below 100%, or no price can reach the margin.
Prices for different target margins
| Target margin ($20.30 costs, 15% fees) | Selling price |
|---|---|
| 20% | $31.23 |
| 25% | $33.83 |
| 30% | $36.91 |
| 40% | $45.11 |
Pricing tips
Price for ads too
If you advertise, include an expected ad cost per order in your fixed costs, or the margin will disappear in your ad account.
Check competitor pricing last
Work out the price you need first, then compare. If the market price is lower, you know exactly how much cost you'd need to cut.
Revisit when costs change
Supplier price rises and shipping increases eat margin quietly. Re-run your prices whenever a cost changes.
Frequently asked questions
How do I calculate a selling price with fees included?
Add up your per-order costs that don't depend on price (product, shipping, packaging, fixed fees), then divide by (1 − target margin − percentage fees). With $20.30 of costs, 15% fees, and a 25% margin, the price is $20.30 ÷ 0.60 = $33.83.
Why not just add my margin to the cost?
Because fees and margin are both taken from the final price. Adding 25% to $20.30 gives $25.38, but after 15% fees that leaves only about 5% profit. The calculator solves for the price where every percentage lands correctly.
How do I protect my margin during a sale?
Set your normal list price high enough that the discounted price still hits your target. If you plan to run 20% off sales and need $33.83, the list price should be $33.83 ÷ 0.80 = $42.29.
What's the difference between margin and markup?
Margin is profit as a share of the selling price; markup is profit as a share of cost. A 25% margin on this product is a 66.7% markup on its $20.30 of costs.