Every "what should I charge to hit X% margin" question gets answered with the same formula: price = cost ÷ (1 − target margin%). It's correct — for exactly one kind of fee. The moment a platform charges even one flat dollar amount alongside a percentage, the formula's own algebra breaks, and it breaks silently: it still returns a number, just the wrong one.
Where the formula comes from, and what it quietly assumes
The formula falls out of one definition: margin% = (price − cost) ÷ price. Solve that for price and you get price = cost ÷ (1 − target%). That's real algebra, not a shortcut — but it only holds if "cost" is a single fixed dollar amount that doesn't change with price. A flat $0.30 fee fits that assumption perfectly. A percentage-of-price fee doesn't, because now the "cost" side of the equation contains price too.
What happens once a percentage fee joins the flat one
With a fee of (fee% × price) + flat, the true margin equation is:
target% = 1 − fee% − flat ÷ price
Solving that for price gives price = flat ÷ (1 − fee% − target%) — the same shape as the original formula, but with the fee percentage subtracted into the denominator too. The commonly-used shortcut just drops that term, quietly assuming fee% is zero.
A worked example, using Stripe's real published rate
Stripe charges 2.9% + $0.30 per transaction. Say the target is to keep 80% of the sale price after that fee.
| Formula used | Price it returns | Actual margin at that price |
|---|---|---|
| Naive: flat ÷ (1 − target%) = 0.30 ÷ 0.20 | $1.50 | 77.1% |
| Correct: flat ÷ (1 − fee% − target%) = 0.30 ÷ 0.171 | $1.75 | 80.0% |
The naive price undershoots the target by exactly 2.9 percentage points — Stripe's own fee rate. That's not a coincidence: algebraically, the naive formula's actual margin always comes out to (target% − fee%), no matter what the flat fee is or what target you picked. Ignore a 2.9% fee rate and you'll always land 2.9 points short, whether you're aiming for an 80% margin or a 50% one.
Why real platforms need more than a corrected formula
That corrected formula still only works when a fee is exactly one flat charge plus one flat percentage — a straight line. Real platform fees usually aren't: Amazon's fulfillment fee jumps between weight-tier brackets, eBay's per-order fee steps from $0.30 to $0.40 at a hard $10 cliff, and Etsy's $0.20 listing fee recharges every time a unit sells rather than once per listing. Once a fee has a threshold, a bracket, or a per-unit recharge in it, there's no closed-form price you can solve for algebraically — the equation has a break in it, not a smooth curve.
That's why this site's own Target Price Calculator doesn't hardcode a formula for any platform. It takes a candidate price, runs it through that platform's own already-published fee engine — the same code behind the Amazon FBA, Etsy, Shopify, and eBay calculators — and checks the margin that comes back. Then it searches: raise the price if the margin's short, lower it if it overshot, narrowing in until the reported margin matches your target. Since it's calling the real engine rather than a second formula trying to mirror it, it can't quietly drift out of sync when a platform's own tier table changes later.
What this doesn't cover
"Margin" here means the share of the sale price left after platform and processing fees only — same definition every calculator on this site uses — not profit after cost of goods, ads, or overhead. Subtract those separately once you have a price. Also worth knowing: a pure percentage fee has a ceiling margin it can never exceed, however high the price goes (for a 2.9% fee, that ceiling is 97.1%) — a target above that ceiling has no achievable price, and the tool reports the ceiling instead of pretending one exists.