Formula needed for calculating retail price based on percentage profit when costs are a percentage of retail price

Hi spooky'

If you description of costs is correct, and your target profit is 30% of your net receipts from eBay, then your markup will be a constant percentage of your cost.

Here are some samples. the row in yellow uses your provided production cost. The rest illustrate that the profit percentage remains the same for different production costs if you keep the same markup percentage.

Columns A, B and C are data entry columns.

B and C have been formatted to display as percentages, The actual values entered in these columns are the decimal fractions that these percentages represent: 0.667 in column B and and 0.1 in column C.

The rest of the columns contain these formulas, entered in row 2, then filled down to the bottom of their columns:

D2: A2+A2×B2

This multiplies the production cost by the markup percentage, and adds the result to the production cost, returning the selling price.

E2: D2−D2×C2

This multiplies the selling price by eBay's commission rate, and subtracts the result from the selling price, returning the amount you get from eBay.

F2: E2−A2

This subtracts your production cost from the amount you get from eBay, returning your net profit amount.

G2: F2÷D2

This divides your net profit by the selling price, returning a decimal fraction representing the fraction of that price that is profit. The cell is formatted to display this fraction as a percentage.

Regards,

Barry

Your selling price is simply your cost divided by (1-%profit - % fee), or, in your example, 20/(1-0.3-0.1).

The formula in C5 is:

=C2/(1−C3−C4)

where the profit percentage is in C3 and fee percentage in C4.

The rows below in the table aren't really needed; they simply show that the short formula is correct.

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Algebraically, one could derive an equation somewhat as follows:

What does the product have to sell for to so that the net amount received after deducting costs and fees equals 30% of the sale price?

Let X=price

Let C=cost

Let F=fee

Then,

X-C-F=0.30X

And F is 0.10X so,

X-C-0.10X=.30X

Rearranging X to one side of equation, we get

X-0.10X-0.30X=C

Which is,

0.6X = C

So X is C/0.6X

If C is 20, then X must by 20/0.6, which approximately 33.38

Generalizing, we can take cost and divide by (1-Profit percentage-fee percentage):

Cost/(1-%Profit- %fee)

20/(1-0.3-0.1)

SG