Begin with a repeatable unit cost

Write down the material cost, labor time, labor rate and any other production cost for one unit. Keep the version or date of the cost sheet. An old material price can make a growing order book look healthier than it is.

Include your own production time even if you do not currently pay yourself an hourly wage. Decide which overheads are allocated per unit and which remain outside this comparison. Make that choice visible so the result is not mistaken for business profit.

Calculate labor and overhead per item before pricing the order →

Add costs at the level where they happen

Some costs change with quantity, some are percentages of revenue and some occur once per order. Keep them separate. A fixed first-order fee has a bigger effect on a small opening order than on a larger reorder.

Use the platform’s current terms for the relevant country, sales channel and order. Check the percentage’s basis: product revenue, shipping revenue or another defined amount. Perpiece’s commission field applies to product revenue; its payment percentage applies to total entered revenue. If the provider uses a different basis, adjust the inputs or calculate that component separately.

Compare a first order with a reorder

Fictional order, USD; illustrative fees only
ItemAmount
24 units × $18 wholesale price$432.00
24 units × $9 production cost−$216.00
15% commission on product revenue−$64.80
First-order fee−$10.00
Contribution after entered costs$141.20

With the same inputs and no first-order fee, the reorder leaves $151.20.

This example omits payment processing, shipping, overhead, returns and taxes. It illustrates the arithmetic; it does not quote the current fees of any marketplace. Add the costs that apply to your actual order before making a pricing decision.

Test quantity and price separately

First keep unit price fixed and compare order quantities. Then keep quantity fixed and compare prices. Changing both at once makes it harder to see which assumption is doing the work.

A minimum-order calculation depends on the chosen target margin and the entered fixed costs. If the variable economics cannot support the target, adding more units may never reach it. Treat a result of “not achievable” as an input problem to review, not an instruction to increase volume.

Keep the result in the right category

Contribution after entered costs is useful for comparing scenarios. It is not revenue, cash received or net profit for the whole business. It also does not prove buyers will accept a higher price.

Perpiece’s free tool works without an account. A saved workspace keeps cost recipes and order scenarios for later comparisons. Start with one actual SKU and a recent order, check the arithmetic against your records, and see whether updating it each time costs change is useful enough to repeat.

Sources and context

Try one example. Then use your own.

Price from materials, labor, fees, and order size. See the margin before you send the quote. The free tool works without an account. Saved workspaces have a 14-day trial with no card, then $19/month.

Try the free Perpiece tool

Contribution is revenue minus the costs you enter. It is not net profit. Include all applicable fees and overhead; marketplace terms can change.