Method

Reverse pricing: from target profit to price

Normal pricing starts with a price and asks what is left. Reverse pricing starts with what is left and asks what the price must be. Only one of those answers the question sellers actually have.

The problem with forward pricing

You set a price, the calculator returns a profit, and then you adjust the price and recalculate. That loop works, but it hides the structure: the fee is a percentage of a number you are choosing, so every price change moves both sides of the equation.

Spreadsheets make this worse. If the fee cell is a formula on the price cell, you cannot ask “what price gives me $20?” without a goal-seek add-in or twenty manual guesses.

The formula

net = revenue × (1 − rate) − fixed − costs revenue = (target + costs + fixed) ÷ (1 − rate) price = revenue − shipping charged

Three inputs: the blended percentage rate, the fixed fees per order, and the costs that do not depend on price (item cost, postage, monthly fixed costs spread over units). Everything else follows.

A worked example

Etsy US, a $12.00 item, $5.20 postage, $6.00 shipping charged to the buyer, one unit, no subscription. The rate is 9.5% (6.5% transaction + 3% payment) and the fixed fees are $0.45 ($0.25 payment + $0.20 listing).

revenue = (20 + 12 + 5.2 + 0.45) ÷ (1 − 0.095) = 41.6 price = 41.6 − 6 = 35.6

Charge $35.60 and you keep $20. Charge $45.00 and you keep $28.51. The gap is the entire reason this formula is worth memorising.

Where it breaks

Tiered fees. If the rate changes at a price threshold, the linear formula gives a price that may fall in a different band than the one you assumed. Solve, check the band, resolve.
Channel-dependent fees. Offsite Ads only apply to some orders. There is no single correct price for a blended rate — decide the share of ad-attributed sales you expect and use that blended rate.
Threshold fees. A flat $2.95 below $15 is a cliff. If the answer lands near the threshold, test both sides; the “better” price can leave you with less.

Use it as a floor, not a ceiling

The output is the minimum price that hits your target. The market decides the maximum. When the floor is above the market, the product is not viable at that cost structure — and that is useful information early, before you have made two hundred of them.

Put it into practice

Reverse pricing calculator→ Target profit to required price All fee calculators→ Ten platforms, one page each

The other guides: How to price handmade products without eating the fees · What counts as revenue for platform fees