Enter the item price, the postage the buyer pays and your marketplace’s fees as its fee page sets them out (Amazon, eBay, Etsy or any other): the calculator shows the commission, the VAT on the fees, the payout and what you keep. Add what the item cost you to see your profit, your margin and the price below which you sell at a loss. It is for a seller based in the UK selling to buyers in the UK.
Enter the sale
The item price is the price the buyer sees, including VAT if you are VAT-registered. Add the postage the buyer pays you, unless they pay it to the marketplace directly.
Copy your marketplace’s fees
Commission often depends on the item’s category. Some marketplaces charge it on everything the buyer pays, postage included, others on the item price alone. Add any payment processing percentage, fixed fee per order and listing or advertising fees you put down to the sale. No marketplace’s rates are built in: they change with the platform, the category and the selling plan, and only the platform publishes them.
Say whether you are VAT-registered
If you are, the VAT in the price is due to HMRC and you reclaim the VAT on the marketplace’s fees, so only the fees before VAT come off your margin. If you are not, you charge no VAT and reclaim none, so the VAT on the fees is part of your cost. You must register once your taxable turnover for the last 12 months goes over £90,000, or you expect it to go over £90,000 in the next 30 days. Postage you charge is normally taxed at the item’s rate.
Add your costs
What the item cost you (excluding VAT if you reclaim it) and your postage cost give the profit and the margin, as a share of sales before VAT, postage included. The break-even price is the lowest item price, to the penny, at which you do not lose money; with a target margin, the calculator also gives the price that reaches it.
Total paid = item price + postage charged.
Commission = base × commission rate, where the base is the total paid or the item price alone; payment fee = total paid × rate.
Marketplace fees = commission + payment fee + fixed fee + other fees, plus VAT on those fees (20%, the standard rate) when it is added.
Paid out = total paid − marketplace fees.
If you are VAT-registered: VAT due = total paid × rate ÷ (100 + rate) (the VAT fraction, 1/6 at 20%), sales before VAT = total paid − VAT due, and kept = sales before VAT − fees before VAT. Otherwise: kept = paid out.
Profit = kept − item cost − postage cost; margin = profit ÷ sales before VAT.
Each fee and each VAT amount is rounded to the nearest penny, a half penny up.
Example: a £24 item with £3.60 postage, from a VAT-registered seller
The marketplace takes 12% of the total including postage, plus £0.25 an order, and adds 20% VAT to its fees. The buyer pays £24.00 + £3.60 = £27.60. Commission: £27.60 × 12% = £3.31; fees before VAT £3.56; VAT £0.71; fees £4.27, or 15.47% of the total, so £23.33 is paid out. The VAT due on the sale is £27.60 × 20 ÷ 120 = £4.60, which leaves £23.00 of sales before VAT; you reclaim the £0.71, so you keep £23.00 − £3.56 = £19.44. With an item cost of £8.00 and postage of £3.10, the profit is £8.34, a 36.26% margin. Below £12.31 the item sells at a loss, and a 40% margin needs a price of at least £26.27.
