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Methodology

Marketplace Fee Profit Planner methodology

Set a viable listing price after marketplace, payment and fulfilment fees.
Duc Nguyen X.By Duc Nguyen X.· Founder, Margin101Last reviewed: View update historyMethodology

Educational only: Business decision support, not accounting, tax or legal advice.

Privacy: Calculations run locally; Margin101 does not receive your commercial inputs.

Update policy: Reviewed when formulas or official dependencies change.

Scope: Market-neutral small-business planning using your own assumptions.

1. Formulas and units

Required Listing Price Ex Tax
requiredListingPriceExTax = cost stack / (1 − marketplace fee − payment fee − target margin)

Where

listingPriceExTax
Listing price (currency units, ex tax)Source: Business record
requiredListingPriceExTax
Required Listing Price Ex Tax (currency units, ex tax)Source: Calculated output
Fee Per Order Ex Tax
feePerOrderExTax = listing price × combined fee rate + fixed fee

Where

listingPriceExTax
Listing price (currency units, ex tax)Source: Business record
fixedFeePerOrderExTax
Fixed fee per order (currency units, ex tax)Source: Business record
feePerOrderExTax
Fee Per Order Ex Tax (currency units, ex tax)Source: Calculated output
Contribution Per Order Ex Tax
contributionPerOrderExTax = listing price − costs − fees

Where

listingPriceExTax
Listing price (currency units, ex tax)Source: Business record
contributionPerOrderExTax
Contribution Per Order Ex Tax (currency units, ex tax)Source: Calculated output
Period Contribution Ex Tax
periodContributionExTax = contribution per order × orders

Where

orders
Orders (operational units)Source: Business record
contributionPerOrderExTax
Contribution Per Order Ex Tax (currency units, ex tax)Source: Calculated output
periodContributionExTax
Period Contribution Ex Tax (currency units, ex tax)Source: Calculated output
Retained Margin Rate
retainedMarginRate = contribution per order / listing price

Where

listingPriceExTax
Listing price (currency units, ex tax)Source: Business record
contributionPerOrderExTax
Contribution Per Order Ex Tax (currency units, ex tax)Source: Calculated output
retainedMarginRate
Retained Margin Rate (decimal rate)Source: Calculated output

Money inputs and outputs use the currency selected in the scenario without changing the canonical methodology. Rates, margins, utilisation and buffers are entered as percentages and converted to decimal values for calculation.

2. Worked example

Input assumptions

The worked rows below come directly from the registered engine and visible default fixture.

Calculation and outputs

Example

The worked rows below come directly from the registered engine and visible default fixture.

Required Listing Price Ex Tax
85.38 currency units
Fee Per Order Ex Tax
15.5 currency units
Contribution Per Order Ex Tax
29.5 currency units
Period Contribution Ex Tax
14,750 currency units
Retained Margin Rate
29.5%

The exact engine-derived outputs are shown in the labelled rows below.

Interpretation

The required listing price shows the price needed to protect the entered retained margin after the full marketplace cost stack.

3. Validation and boundary checks

  • All values must be finite and inside the visible validation boundaries.
  • Rates are entered as percentages and calculations retain decimal precision.
  • Money uses one consistent ex-tax currency and planning period.

4. Assumptions and source classification

  • Provider fees, exchange rates, return behaviour and operating performance are user-entered scenarios.
  • No provider plan, jurisdiction, tax rate or market benchmark is embedded.
  • The engine retains full precision and display formatting never feeds back into calculation.

This planner has no current policy-data dependency. Its commercial assumptions are user supplied. Registered family-level regression suites exercise the shared business-logic engine and worked-result reconciliation.

5. Limitations

  • The model does not forecast demand, provider changes, exchange rates or operational performance.
  • It does not replace accounting, tax, legal or financial advice.
  • Marketplace and direct-channel rates are editable contract inputs; the workflow does not embed a provider schedule, tax withholding rule, refund policy or marketplace recommendation.

This is educational decision support, not tax, accounting, legal or financial advice. Check the treatment of your actual transactions under the rules that apply to your business and seek qualified advice where appropriate.

6. Update and evidence policy

Registered family-level suites test formula invariants and example reconciliation; the release ledger records that coverage without claiming a separate oracle for every line of public copy. There is no official threshold or benchmark to refresh for this planner. Commercial inputs remain user-supplied because they vary by business and contract.

Change history

  1. : Initial public release of the planner and methodology after pre-launch calculation, content, source and interaction review.

Related reading

Guides to interpret the decision and its assumptions.

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