A handmade candle that sells for $28 on Etsy can net its maker less than $4 after platform fees, payment processing, shipping materials, and the cost of wax, wick, and fragrance. A $30 supplement on Amazon FBA can yield less than $6 after referral fees, fulfillment, and storage. E-commerce platforms make selling easy — but they also take a significant share of every transaction, and sellers who build prices without accounting for every layer of cost routinely discover they are working for far below minimum wage.
The True Cost Stack
Before setting any price, you need to calculate your total cost per unit sold. The cost stack has four layers:
- Cost of goods sold (COGS): the direct cost to produce or source one unit — materials, manufacturing, packaging, inbound shipping to your warehouse or Amazon's fulfillment center.
- Platform fees: every marketplace takes a percentage of the sale price. These are non-negotiable and must be built into your price.
- Fulfillment and shipping costs: picking, packing, and shipping to the customer — whether you do it yourself or pay Amazon/a 3PL to do it.
- Overhead allocation: a proportional share of fixed costs — software subscriptions, photography, advertising, returns processing.
Amazon FBA Fee Structure
Amazon can charge referral, fulfillment, storage and other fees. Amounts depend on category, dimensions, weight, services and applicable date. Check the official seller pricing page and a quote for your SKU. Do not treat a historical fulfillment fee or the calculator's preset as a current rate.
Illustration only: $30 revenue, an assumed 15% referral fee ($4.50), $3.22 fulfillment, $0.30 allocated storage and $6 product cost give $14.02 costs and $15.98 remaining, or 53.27% of revenue. These assumed fees are not current quotes. Returns, advertising, subscriptions, taxes and overhead would reduce what remains.
Etsy Fee Structure
Check Etsy's official fee schedule for listing, transaction, processing, advertising and country-specific charges. Processing rates depend on the seller's location. The following US-dollar example uses selected fee assumptions for arithmetic; it does not establish current rates for your account.
Illustration: a $28 candle plus $5 shipping charged to the buyer gives $33 revenue. Assume a 6.5% transaction fee rounded to $2.15, processing of 3% + $0.25 ($1.24), $0.20 listing, $6.50 product cost, $5 shipping expense and $0.75 packaging. Costs total $15.84, leaving $17.16, or 52% of revenue. An assumed additional 15% advertising fee ($4.95) leaves $12.21, or 37%. Other overhead and tax are excluded.
TikTok Shop Fee Structure
TikTok Shop charges depend on market, category, program and applicable date. Creator affiliate commissions and fulfillment can add separate costs. Use your seller account's current fee statement rather than an undated percentage from an article or preset. An illustrative percentage is useful for sensitivity testing but is not an official quote.
Platform Fee Comparison
| Platform (illustrative assumptions, not current quotes) | Assumed Platform Fee | Assumed Processing | Other Costs |
|---|---|---|---|
| Amazon FBA | 8–15% referral | Included | $3–$7+ per unit (FBA) |
| Etsy | 6.5% transaction | 3% + $0.25 | Seller-arranged |
| TikTok Shop | 2–8% commission | Included | Seller-arranged |
| eBay | 13.25% final value | Included | Seller-arranged |
| Shopify (own store) | 0–2% platform | 2.9% + $0.30 | Seller-arranged |
How to Build a Price That Works
Choose a target margin based on your own costs and business needs, not a universal recommended percentage. The SBA's break-even guidance (legacy business guide) explains fixed costs, variable costs and revenue. As an illustration, treating all per-unit costs as a fixed $14 and choosing a 30% margin gives $14 / (1 − 0.30) = $20. Percentage-of-price fees require their own treatment, and returns, overhead and taxes can change the result.
Do not set prices based on competitor prices without first running your own cost stack. Your competitor may have lower COGS, higher volume discounts, or be running at a loss to gain market share. Matching their price without knowing your own costs is how sellers go out of business while appearing to have strong sales.
Calculate Your E-Commerce Profit
Our E-Commerce Profit Calculator estimates a per-unit remainder from sale price, product cost, shipping/packaging and the selected platform's illustrative fee preset. It is not complete business net profit. Advertising, returns, subscriptions, storage, taxes, overhead and account-specific charges can reduce what remains. Check current seller statements before relying on a preset; use the tool to compare assumptions, not to predict exactly what you keep.