Frequently asked questions

There is no single correct figure, and anyone quoting one without asking what you sell is guessing. Margins depend on category, order value and whether you ship physical goods. What matters more is direction: know your current net margin, then work on the biggest single line in the split bar above.

Almost always shipping and payment processing. Both are easy to leave out of a mental calculation, and on a low-priced item the fixed portion of the payment fee (a flat $0.25 or so per transaction) can be several percent of the whole sale on its own.

No. The whole calculation runs in your browser. Nothing is sent anywhere, there is no account, and closing the tab discards everything.

Yes. Etsy's help documentation states the 6.5% applies to the total cost of the item along with shipping and gift wrap when you charge the customer for those. This calculator applies it to item price plus shipping charged, which is why its result is slightly lower than calculators that only fee the item price.

It is a set rate that varies by country, so there is no single figure that would be honest to print here. Etsy publishes the per-country rates in its help centre — enter yours in the field above and the result updates.

For a rough per-sale figure, yes, include it once. For a full picture, remember the fee is charged whether or not the item sells and again on renewal — so a listing that never sells is a pure cost that this per-order view does not capture.

No. It is an independent tool and is not endorsed by or connected to Etsy in any way. Etsy's own fee pages are the authority on its rates.

The one for your product's own fee category, taken from Seller Central. Amazon lists category-specific rates and price-tier exceptions rather than one universal percentage, so any single figure quoted for 'all products' is an approximation.

Rather than a fixed target, judge it against your cash cycle: the money is locked up from paying the supplier until Amazon pays out. A higher ROI means the same money can be reinvested more times per year, which matters far more than margin percentage when you are starting with little capital.

No — that is a fixed business cost, not a per-unit one. Put it into the break-even calculator as a fixed cost instead, which will tell you how many units you need to sell to cover it.

Not for billable hours, no. Every hour spent on proposals, invoicing, admin and finding the next client is unpaid, and those hours are unavoidable. Billing 25 of 40 hours is normal; billing 35 of 40 sustainably is rare.

Your own effective rate, including any self-employment or social contributions, which differs by country and by income level. If you genuinely do not know it yet, entering a deliberately cautious figure is safer than entering zero — a rate set too low is very hard to raise with existing clients.

That gap is useful information, not a reason to discount. It means either your target income needs more billable hours than you have, or the market segment you are in cannot fund the life you are planning. Both are solvable — by specialising into better-paying work, or by adjusting the target — but not by pretending the arithmetic is different.

Fixed costs are the ones you pay this month even if you sell nothing: subscriptions, rent, a marketplace store fee. Variable costs occur per sale: materials, packaging, postage, percentage fees. If you are unsure, ask whether selling one more unit increases the cost — if yes, it is variable.

Yes. Convert them to a per-unit amount at your usual price. A 6.5% fee on a $24 item is $1.56, so include that in the variable cost per unit alongside materials.

Only if you put your own wage in as a fixed cost — and you should. A business that breaks even without paying its owner is not at break-even; it is a job funded by you.

It depends on the product, and that is not a dodge — it is the actual finding. Percentage-based channels like Etsy and eBay treat a cheap item relatively kindly and take a large absolute cut of an expensive one. Amazon FBA's flat fulfilment fee does the reverse: it is punishing on a low-priced item and can be excellent on a heavier, higher-priced one. Your own store has the lowest commission but a fixed monthly cost that only becomes cheap at volume. Enter your real numbers above rather than trusting any general ranking.

No, and deliberately so — ad spend varies far too much between sellers to model as a channel property. If you know your realistic advertising cost per sale on a channel, add it to the product cost field to see the effect. Amazon and Etsy sellers who rely on internal ads should do exactly that, because it often changes the ranking.

Because the monthly subscription has to be paid out of the orders you actually get. Below roughly 20 orders a month, a $39 plan usually costs more per order than a marketplace commission would, and marketplaces bring their own traffic while your store does not. Volume is what makes an owned store the cheapest channel — not the fee schedule alone.

No. It is an independent tool with no relationship to Etsy, eBay, Amazon or Shopify, and no affiliate arrangement with any of them. That independence is the entire reason it can rank them against each other.

Free shipping generally converts better, and on marketplaces that favour it in search there is a visibility argument too. But it is a pricing decision: the parcel still costs what it costs, so the item price has to carry it. Use this calculator with the charge set to 0 to see exactly how much the price needs to absorb before you make the switch.

Several do. Etsy's help documentation states its transaction fee applies to the total order including shipping and gift wrap when you charge the customer for those. This is why the calculator has a fee-on-shipping field — leaving it out makes a shipping charge look more effective than it is.

For an honest picture, yes. It is not a cash cost today, which is why it gets ignored, but it is the cost that determines whether growth is worth having. A business where each order takes ten unpaid minutes stops being viable at exactly the point it starts working, and you want to know that before you get there rather than after.

Divide your normal contribution per unit by the discounted contribution per unit, subtract one, and read it as a percentage. Contribution is price minus every variable cost. If a $40 item with $26 of variable cost is discounted to $32, contribution goes from $14 to $6, so you need $14 ÷ $6 − 1 = about a 133% lift in units to stand still.

Adding value almost always protects margin better, because a discount cuts the price on every single unit sold while a bundle or a free-shipping threshold raises the order value instead. The exception is genuinely stale stock, where recovering cash from inventory that is costing you storage beats holding it.

Yes, and the annual view above is the reason to run it before committing. Deep seasonal discounting is a customer-acquisition expense, and it is only profitable if those customers come back at full price. Set the months field to how long the promotion really runs — most sellers discount for considerably longer than they intend to.

There is no honest universal figure, because it depends on your country, your income level, your business structure and your deductible expenses. Many freelancers in countries with both income tax and self-employment contributions find the combined share lands somewhere around a quarter to a third of profit — but that is a planning heuristic, not your number. Enter your own rates above and confirm with a professional.

In most systems, on profit — income minus allowable business expenses. That is why the expenses field is here. What counts as allowable varies significantly by country, and getting it wrong in either direction costs money: overclaiming risks penalties, underclaiming means paying tax on money you already spent on the business.

No. It does arithmetic on figures you supply. It has no knowledge of your jurisdiction, your allowances or your circumstances, and nothing it outputs should be filed or relied on as a liability. It exists so you are holding roughly the right amount of cash when the real calculation happens.

Reorder point = (average daily usage × average lead time) + safety stock, where safety stock = (max daily usage × max lead time) − (average daily usage × average lead time). The first part covers expected demand during a normal wait; safety stock covers the case where demand runs high and the supplier runs late at the same time.

Enough to cover the difference between your normal case and your realistic worst case — which the formula above computes rather than guesses. The honest constraint is usually cash rather than logic: the calculator shows what your chosen buffer costs, and if that figure is uncomfortable, the productive fix is shortening or stabilising lead time rather than simply accepting more stockout risk.

Yes, and lead time is where FBA sellers most often get it wrong. Your lead time is not just the supplier's production and freight — it includes Amazon's receiving and check-in time at the warehouse, which is outside your control and varies. Use the full order-to-sellable duration, not the date the container lands.

Convert at the rate your own provider actually gives you, add the FX spread and any cross-border payment surcharge, add the real extra shipping cost, then round up to a price that looks native to that market. The test is not whether the converted number looks right — it is whether your margin after all four of those costs is still one you would accept.

For pricing decisions, no. Live mid-market rates are not the rate you receive, and repricing every time the market moves makes your prices look unstable to customers. Most sellers set a price with a few points of buffer for rate movement and revisit it periodically rather than continuously.

Normally the buyer, on delivery, and normally without expecting it — which is why parcels get refused. It does not affect your margin but it very much affects your reviews. Say plainly at checkout that duties and local taxes may apply and are the buyer's responsibility.

Any figure above your break-even, which is set by your own margin rather than by an industry benchmark. Price divided by contribution per order gives it: a 60% contribution margin breaks even at about 1.67x, while a 20% margin needs 5x just to stand still. This is why quoted benchmarks are close to meaningless without the margin attached.

Divide your selling price by your contribution per order, where contribution is price minus all variable costs excluding advertising. Do not use a margin figure that already has ad spend removed — that double-counts advertising and overstates the target, sometimes badly enough to make you pause profitable campaigns.

Only with measured evidence of repeat purchase, and knowing you are funding acquisition from cash. If a customer reliably orders three times a year, the first order can be a loss and the relationship still profitable. If that repeat rate is an assumption rather than a measurement, running below break-even simply loses money at scale.

More than the refund suggests, because a return costs the refunded revenue plus outbound shipping, return shipping, any fees the processor keeps, restocking labour, and the lost value of stock that comes back unsellable. That total commonly exceeds the profit the order would have made, so the orders that stick have to cover the ones that do not.

It is category-dependent to the point where a general figure is not useful — apparel and footwear run dramatically higher than most other categories, and within apparel it varies by fit sensitivity. The only rate worth putting in the field above is your own, from your own dashboard.

It genuinely cuts both ways: free returns raise conversion and raise the return rate at the same time. Which effect wins depends on your margin and your category, so run the calculation both ways. Sellers with thin margins and high-return categories are the ones most likely to find that free returns cost more than they earn.

Enough to be visibly worth taking and no more, judged against margin rather than price. Run the calculator at a few price points and watch the bundle margin line: the right discount is the largest one that keeps bundle margin comfortably above your normal per-item margin, since you are also saving on shipping and fees.

They can, through two channels: additional units that would not have sold, and fixed per-order costs paid once instead of several times. They stop working when the discount is deep enough that you are mostly selling items people were going to buy anyway at a lower price — which the comparison above is built to reveal.

Items that complete a job for the customer, so the bundle reads as a solution rather than a sale. Complements outperform variety, and pairing a strong seller with dead stock trains buyers to expect the discount. If you would recommend the items together in a message to a customer, they belong in a bundle.

Because of the fixed per-transaction component. A 2.9% + $0.30 structure costs 9% on a $5 order and about 3.2% on a $100 one — the percentage is constant and the fixed fee is not, so it dominates small amounts. Any product under about $10 needs this checked explicitly before pricing.

It depends on your average order value, which is why the tool compares three side by side. Low-percentage-high-fixed processors win on large orders; low-fixed processors win on small ones. Enter your real average order and your own quoted rates rather than trusting a general ranking.

Often not in full — many processors retain the fixed portion of the fee on a refunded transaction, and policies vary between providers and over time. Check your provider's current refund policy, and model the effect on your margin in the return cost calculator, where unrecovered fees are an input.

Start from true unit cost — materials plus labour at a real hourly rate plus a share of overhead — then apply the margin you need to keep. Wholesale price = unit cost ÷ (1 − your margin). The output only means something if labour is in the cost; leaving it out is what makes wholesale orders unprofitable.

Enough that the order is worth the production time, judged against what you would make selling those units direct. Since direct selling at RRP usually earns considerably more per unit, wholesale needs to justify itself on volume, predictability and reach rather than per-unit margin.

You can, and it is the fastest way to lose them. A retailer who finds the maker undercutting them stops reordering, because their stock has become unsellable. Price your direct sales at or near the recommended retail price — you keep more per unit that way anyway, since you are earning the retail price minus fees rather than the wholesale price.

Divide total marketing and sales spend by the number of new customers acquired in the same period. Include everything you spend to acquire: ad spend, agency or freelancer fees, discounts given specifically to acquire first-time buyers, and any tooling dedicated to acquisition. Ad spend alone understates CAC for most businesses.

Around 3:1 is the commonly cited benchmark for a sustainable acquisition-led business, but treat it as a heuristic rather than a constant — the right number depends on your overhead and how reliable your retention data is. Note that a very high ratio is not automatically good news: it often means you could profitably spend more on acquisition than you currently do.

Margin, always. Revenue-based LTV overstates what a customer is worth by exactly your cost of goods, and businesses that budget acquisition against revenue LTV routinely spend more to acquire a customer than the customer will ever contribute. Use gross margin after product, shipping and fees — before marketing, since marketing is the thing you are evaluating.