Pricing for a 25% profit margin
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A 25% margin means you keep 25 cents of every dollar the buyer pays, after the marketplace has taken its cut. Working out the price that delivers it is not cost plus 25% — the fee is charged on the price you are solving for, so the two have to be solved together.
The price you need
| Total cost per unit | $10.00 |
|---|---|
| Percentage fee | 15% |
| Target margin | 25% |
| Price required | $26.42 |
Pricing by the usual shortcut — cost ÷ (1 − 0.25) — gives $13.33, which is $13.09 short. That gap is the referral fee on the price itself, and it is the reason a product priced for a 25% margin so often reports less.
The same target as a markup
A 25% margin is a 33.3% markup on cost. If a supplier or a spreadsheet asks you for a markup, that is the number — using 25% as a markup instead would leave you well short of the margin you were aiming at.
What that target costs on each channel
| Channel | Price required | Percentage fee |
|---|---|---|
| WooCommerce (own store) | $14.29 | 2.9% |
| Shopify Basic | $14.83 | 2.9% |
| TikTok Shop | $15.37 | 8% |
| Shopify Grow | $15.70 | 2.7% |
| Etsy | $15.95 | 9.5% |
| Walmart Marketplace | $16.67 | 15% |
| eBay | $16.68 | 13.25% |
| Shopify Advanced | $19.71 | 2.5% |
| Amazon FBA | $26.42 | 15% |
Questions
How do I calculate a 25% profit margin?
Divide your total cost by one minus your fee rate minus 0.25. With fees of 15% on a $10.00 unit that gives $26.42. Dividing by (1 − 0.25) alone leaves out the fee and undercharges by $13.09.
Is a 25% margin realistic on Amazon?
It depends almost entirely on the category's referral rate and your landed cost. At a 15% referral fee the arithmetic works comfortably up to about 50%; beyond that the price needed usually stops being competitive long before the formula stops producing one.
What is a 25% margin as a markup?
33.3%. Margin divides profit by the price, markup divides it by the cost, so the markup is always the larger figure — and the gap widens fast as the margin rises.
Rates on this page are the published schedules as of 2025-01-15 and are applied by the same code the calculator runs. Marketplaces reprice — confirm against your own seller dashboard before setting a price.