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provided "as is"; you should always check things before setting your prices.
Calculate accurate Amazon listing prices and eBay listing prices to make sure you profit
When you list an item on Amazon or eBay you need to calculate a listing price that will generate the profit you want.
That can be surprisingly complicated. There are lots of different costs you have to think about when you are working things out. Some are fixed price elements such as the cost of the item, or the cost of the postage. But other items are based on a percentage of the final selling price, such a PayPal fees or eBay's Final Selling Fee.
But how can you build in a percentage of the final listing price, when you don't know the final listing price until you know what eBay or PayPal will charge. It can get confusing.
The sensible thing to do is to use our listing price calculator. It will take all the fixed and variable costs and come up with the price you need to sell at to make the mark up, or the profit, you want.
It uses a formula we developed and documented in our ecommerce handbook. If you like algebra then check out the handbook to see how we came up with it. Rather than take you through the proof, lets take you through the steps.
Step 1: What's the cost of the item (net of VAT).
Step 2: You might want to add a fixed amount as a profit. If you do, then this is the point to enter it.
Step 3: Whether or not you added a fixed amount as a profit, you can also enter a percentage mark up. Maybe you want to generate 20% as a profit based on the cost price.
Step 4: Make sure to add in your Postage and Packaging. Is it First Class or is it Fulfilled By Amazon, add the costs in here. We have Royal Mail UK Standard Postage and Amazon Domestic FBA Calculators you can use separately.
Step 5: Next you need to enter the percentage the marketplace will charge as final selling fee. That might be 11% for eBay as an example.
Step 6: Now you need to enter the credit card percentage fees. PayPal might be 3.4%, your Payment Processor might take 2%.
Step 7: Some marketplaces charge a fixed fee for listing (such as eBay) and Payment Processors do the same. For instance PayPal charge 20p per transaction. Add up those fixed fee elements and enter the number at Step 7.
Step 8: Finally it's time to enter the VAT level. Standard UK VAT is 20%, Books are 0% and so on.
And you are done.
You'll see in the results area that we calculate the listing price you need to make the profit that you want.
There are a number of things you will have to do to ensure you make a profit on eBay or Amazon.
Of course you'll need to calculate the correct listing price, so the calculator we have here will certainly help.
But there is more to selling on Amazon and eBay than just price. You need to have great customer service, deliver speedily and ensure your costs are kept under control.
You should be looking at marketplace management software, such as Seller Dynamics, which helps you manage all the complex areas of selling online. You need to reprice against your competition, process orders and order your shipping reliably and consistently.
Yes! It's very generic in nature. You need to know the same information wherever you are selling.
What is the cost of the item, what is the VAT level, what will Postage and Packing cost, and so on.
Every marketplace charges either a fixed price or a percentage of the sales value, or a combination of both. Our Listing Price Calculator handles all that.
And you'll always have Payment Processing fees; again they can be fixed and/or based on a percentage.
The Listing Price Calculator will cope with all your favourite marketplaces and generate a profitable price for all of them.
Yes. Simpy enter the VAT level for the item in question and the Credit Card Processing Percentage. You will probably also have a fixed transaction fee as well from your Credit Card Processor, you can enter that as well.
Bear in mind that VAT levels are different across Europe. If you are selling in another EU country then you should check the local rate as you may be liable for VAT in that country. Specifically: if you have crossed the distance selling threshold level; or if you are fulfilling locally. Check with a VAT specialist if you are not sure.
We have a separate VAT calculator you can use. And if you want to check you PayPal fees then you can see our PayPal calculator here.
The formula we use is fully documented and explained in our ecommerce handbook. We also describe it briefly within the Amazon and eBay Listing Calculator above.
The ecomerce handbook not only shows you the formula but takes you through a worked example, and highights that if you make crude assumptions about your listing prices that you can lose out heavily.
You might want to use the formula within a spreadsheet, or perhaps you want to make a few adjustments to it, for your exact business situation.
Feel free to use it as you see fit.
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