How to Find Your eBay Break-Even Price (and Your Minimum Offer)
Quick answer
Your eBay break-even price is the sale price at which net profit equals zero. Because fees are a percentage of the sale, use this formula: Break-even price = (Item cost + Shipping cost + Packaging + Per-order fee) ÷ (1 − Fee rate − Ad rate). To price for a target margin, subtract the margin from the denominator too: Price = Fixed costs ÷ (1 − Fee rate − Ad rate − Target margin).
Key takeaways
- You can't just add fees to your cost — fees grow with price, so divide fixed costs by (1 − percentage costs).
- Break-even is the floor for auto-decline on Best Offer and the bottom of any markdown sale.
- Target-margin pricing uses the same formula with your desired margin added to the percentage costs.
- Recalculate when shipping rates, fee rates, or your ad rate change.
- Items whose break-even is close to market price are poor buys — skip them at the sourcing stage.
Every eBay seller needs two numbers for every item: the price below which they lose money, and the price that gives them the margin they want. With those two numbers, decisions about Best Offers, markdowns, and whether to buy an item in the first place become simple.
Why can't you just add fees to your cost?
Suppose your item cost, shipping, and packaging add up to $20 and eBay's fees are about 14%. It's tempting to say the break-even is $20 + 14% = $22.80. But eBay takes 14% of the sale price, not of your cost. At $22.80, eBay takes $3.19, leaving you $19.61 — still a loss.
Because percentage fees grow as the price grows, you need to divide your fixed costs by what's left after the percentage fees.
What is the break-even formula for eBay?
Where:
- Fixed costs = item cost + shipping label + packaging + per-order fee
- Fee rate = your category's final value fee percentage as a decimal (e.g. 0.136)
- Ad rate = your Promoted Listings rate as a decimal (0 if you don't promote)
Example: Item cost $14, label $8, packaging $1, per-order fee $0.40 → fixed costs $23.40. Fee rate 13.6%, ad rate 4%.
Break-even = $23.40 ÷ (1 − 0.136 − 0.04) = $23.40 ÷ 0.824 = $28.40.
Check: 17.6% of $28.40 is $5.00. $28.40 − $5.00 − $23.40 = $0. ✓
How do you price for a target profit margin?
Add your desired margin to the percentage costs:
Using the same item with a 30% target margin: $23.40 ÷ (1 − 0.136 − 0.04 − 0.30) = $23.40 ÷ 0.524 = $44.66.
If the market price for that item is $35, you now know immediately that you can't hit 30% — you'd make about 15% at $35. That's the kind of insight that should drive buying decisions. See what counts as a good eBay margin.
How should break-even guide Best Offers?
eBay lets you set an auto-decline price and an auto-accept price for Best Offer listings. A simple approach:
- Auto-decline below your break-even plus a small buffer for returns (5–10%).
- Auto-accept at or above your target-margin price.
- Counter manually for everything in between.
Remember that sales tax and buyer-paid shipping change the fee base. If you charge shipping separately, calculate fees on item + shipping, and include the shipping you collect as revenue.
Break-even cheat sheet
Fixed costs ÷ divisor. Divisors assume a 13.6% fee rate.
| Ad rate | Break-even divisor | 20% margin divisor | 30% margin divisor |
|---|---|---|---|
| 0% | 0.864 | 0.664 | 0.564 |
| 3% | 0.834 | 0.634 | 0.534 |
| 5% | 0.814 | 0.614 | 0.514 |
| 8% | 0.784 | 0.584 | 0.484 |
| 10% | 0.764 | 0.564 | 0.464 |
Example: fixed costs $30, 5% ads, 20% target → $30 ÷ 0.614 = $48.86.
When should you recalculate your break-even price?
- When carrier rates change (usually at least once a year).
- When eBay updates category fees.
- When you change your ad strategy.
- When an item's return rate is high — add expected return cost to fixed costs.
Our free eBay fee calculator does this math for you and shows break-even and target prices for 10%, 20%, and 30% margins. Once items are selling, MyOrderProfit shows actual margin per order so you can see whether your pricing assumptions hold up. For broader strategy, read our eBay pricing strategy guide.
Frequently asked questions
What is the formula for break-even price on eBay?
Break-even price equals your fixed costs (item cost, shipping, packaging, and per-order fee) divided by one minus your fee rate and ad rate. For example, $23.40 divided by 0.824 equals $28.40.
Why can't I just add eBay's percentage to my cost?
eBay's fee is a percentage of the sale price, not your cost. Adding the percentage to your cost undercounts the fee because the fee grows as the price grows.
What should my Best Offer auto-decline price be?
Set it slightly above your break-even price, with a buffer of 5 to 10 percent to cover returns and unexpected costs, and set auto-accept at the price that delivers your target margin.