Price backwards: pick the margin you want, then find the price
Most pricing advice starts from your costs and doubles them. That's a guess dressed up as a method, and it breaks the moment fees enter the picture. Here's the arithmetic that goes the other way — from the margin you need to the price that produces it.
The formula
Write R for the whole order (item price plus the shipping you charge), C for everything one unit costs you, and m for the margin you want as a decimal. Etsy takes a percentage of R plus two flat charges, so:
The percentages in the middle are the transaction fee and payment processing; add 0.15 more if the sale might come through Offsite Ads. The two flat numbers are the listing fee and the fixed part of processing.
Worked table
A candle that costs $6.20 in wax, wick and vessel, $4.40 to post, $4.00 of your time — $14.60 all in — with $5.00charged for shipping. Here’s the item price each target margin demands:
Read the gap between the two columns: protecting the same margin against a 15% ad fee costs roughly $5.77 more on the sticker at a 20% target. That is the honest price of Offsite Ads, and it is why sellers who can opt out often should.
Three sanity checks before you publish the price
- Does it survive a bad order? One return or lost parcel wipes out the margin on several good ones. At 10%, ten sales pay for one disaster; at 30%, three do.
- Does it survive a materials rise? Add 15% to Cand re-run. If the margin goes negative, your price has no slack and you’ll be repricing under pressure later.
- Is it defensible on the listing? A higher price needs the photos, the copy and the reviews to carry it. Pricing is half arithmetic and half merchandising, and this page only does the arithmetic.
Rounding
Round up to a clean number, never down. The table says $16.35? Charge $17.00. Rounding down to look friendlier gives away margin you calculated deliberately, and no buyer has ever abandoned a handmade cart over forty cents.
Fee rates on this page were verified against Etsy’s published fee schedule on 2026-07-21 and are stored in a single config file, so every page here shows the same numbers. Etsy can change fees at any time.