Quick answer
Start with all fixed unit costs, then solve for the selling price after percentage fees and target margin.
This formula works when the fee and target margin are both measured as percentages of the final selling price.
Build the price model
Five inputs should be explicit.
Landed cost per unit
Use the true sourcing cost at the defined destination, including product, freight, duty, customs and direct import costs.
Fulfillment or delivery cost
Add any fixed per-unit cost that must be recovered through the selling price.
Other fixed selling costs
Packaging, handling or other fixed channel costs can be included if they are reliably estimated per unit.
Percentage selling fee
Marketplace commissions or payment fees based on revenue should be modeled as a percentage of selling price.
Target profit margin
Define margin as profit divided by selling price, not markup on cost.
Worked example
A landed-cost-driven selling price.
Assume landed cost of $17.50, fulfillment of $2.20, other fixed selling cost of $0.80, a 10% selling fee and a 30% target margin.
- Landed cost
- $17.50
- Fulfillment
- $2.20
- Other fixed cost
- $0.80
- Fixed unit cost
- $20.50
- Selling fee
- 10%
- Target margin
- 30%
- Denominator
- 60%
- Target price
- $34.17
- Selling fee
- $3.42
- Target profit
- $10.25
- Fixed cost
- $20.50
Why the denominator matters
Fees and margin both consume parts of the selling price.
At a 10% fee and 30% margin, 40% of the final selling price is reserved before fixed cost is covered. That leaves 60% of the selling price for the $20.50 fixed unit cost, so $20.50 รท 0.60 = $34.17.
If fee rate plus target margin reaches 100%, the model cannot produce a viable positive selling price.
Cost target vs market price
The calculated price is a benchmark, not proof of demand.
A product may need to sell for $34.17 to support the target economics, while the market only accepts $29.99. That gap is useful information: lower sourcing cost, lower fees, lower fulfillment cost, a smaller target margin or a different product may be required.
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