Ecommerce Pricing, Margin & Break-Even Suite
Eliminate underpricing mistakes. Determine required selling prices to hit target profit margins while automatically absorbing payment gateway fees, marketplace deductions, and shipping costs.
Cost & Fee Structure
Margin & Target Pricing
Real-TimeCost Structure Summary
Margin vs. Markup: The Critical Difference
Many merchants mistakenly treat profit margin and markup as interchangeable concepts, leading to severely underpriced inventory and negative cash flow once marketplace commissions and payment gateways take their cut.
1. Margin vs. Markup Mathematical Matrix
| Cost (COGS) | Selling Price | Dollar Profit | Markup on Cost | Profit Margin on Revenue | Strategic Implication |
|---|---|---|---|---|---|
| $20.00 | $25.00 | $5.00 | 25.0% | 20.0% | High risk: platform and ad fees will wipe out profit |
| $20.00 | $30.00 | $10.00 | 50.0% | 33.3% | Standard retail floor for direct-to-consumer e-commerce |
| $20.00 | $40.00 | $20.00 | 100.0% | 50.0% | Healthy margin: comfortably absorbs 15% marketplace fees |
| $20.00 | $60.00 | $40.00 | 200.0% | 66.7% | High-margin category (boutique jewelry, luxury crafts) |
| $20.00 | $100.00 | $80.00 | 400.0% | 80.0% | Software, digital downloads, or proprietary inventions |
2. Target Price Derivation Formula
Once your cumulative monthly unit sales pass your calculated break-even threshold, every additional unit sold contributes 100% of its unit contribution margin directly to pure profit. Fixed overhead is already fully paid off.
Strategic Lever: In high fixed-cost months, focus on maximizing unit velocity even at slightly lower margins. As soon as the break-even volume is crossed, you can selectively increase ad bids to capture market share because each additional conversion is immensely profitable.
3. Global Payment Gateway Fee Standards (2026 Reference)
| Region & Gateway | Domestic Card Percentage | Fixed Fee per Transaction | International Surcharge | Typical Currency |
|---|---|---|---|---|
| United States (Stripe / Shopify) | 2.90% | $0.30 | +1.50% | USD ($) |
| United Kingdom (Stripe / Shopify) | 1.50% – 2.00% | £0.20 | +2.00% | GBP (£) |
| European Union (SEPA / EEA Cards) | 1.50% – 2.00% | €0.25 – €0.30 | +2.00% | EUR (€) |
| Canada (Stripe / PayPal) | 2.90% | CA$0.30 | +1.50% | CAD (CA$) |
| Australia (Domestic E-Commerce) | 1.75% – 2.70% | AU$0.30 | +1.75% | AUD (AU$) |
4. Frequently Asked Questions
What is the mathematical difference between markup and margin?
(Profit / Cost) * 100. Margin is the percentage of the final selling price that remains as profit: (Profit / Revenue) * 100. A 100% markup always equals a 50% profit margin.