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Miraç Özdemir
E-commerce Shipping, Volumetric Weight & Packaging

Free Shipping Break-Even Price

When you pay for free shipping, computes your contribution at the current price, the minimum sale price for a target contribution, and how much shipping adds to that price.

Version 2

Things to keep in mind:

  • VAT on commission, withholding, advertising and return costs are not modelled; use the marketplace sale tools for those.
  • Costs and sale price must be on the same VAT basis.
  • If the sale price is 0 the contribution margin shows 0.
  • Target contribution and commission rate are your inputs; check your marketplace contract for campaign terms.

Calculator

Costs

TRY

Unit purchase cost of the product (TRY, excl. VAT).

TRY

Shipping fee you pay under free shipping (TRY, excl. VAT).

TRY

Box, filler, tape and label cost (TRY).

Price and commission

Marketplace commission charged on the sale price. Maximum 99.9999%.

TRY

Current or planned sale price, on the same VAT basis as costs (excl. VAT).

TRY

Minimum amount you want to earn per item. 0 for break-even.

After the first calculation, the result updates automatically when you change a value.

Result

Enter the values and press Calculate to see the result here.

About this tool

Free shipping is free for the customer, not for the seller: the sale price has to pay for it. Because marketplace commission is charged on the sale price, covering shipping means raising the price by more than the shipping fee itself.

Formulas

  • Revenue after commission = sale price × (1 − commission ÷ 100)
  • Contribution = revenue after commission − (product + shipping + packaging)
  • Contribution margin (%) = contribution ÷ sale price × 100; 0 if the sale price is 0
  • Minimum price = (product + shipping + packaging + target contribution) ÷ (1 − commission ÷ 100)
  • Minimum price without shipping = (product + packaging + target contribution) ÷ (1 − commission ÷ 100)
  • Shipping price impact = minimum price − minimum price without shipping

Amounts are rounded HALF_UP to 2 decimals. Enter all amounts on the same VAT basis (for example excluding VAT); VAT on commission is not modelled separately.

Example 1: product 100, shipping 30, packaging 5 TRY, commission 15%, sale price 200 TRY: revenue after commission 170; contribution 35.00 TRY; margin 17.50%. Break-even price 135 ÷ 0.85 = 158.82 TRY; without shipping 123.53 TRY, so shipping adds 35.29 TRY.

Example 2 — with a target: product 80, shipping 20 TRY, packaging 0, commission 10%, sale price 150 TRY, target contribution 25 TRY: current contribution 35.00 TRY (margin 23.33%); minimum price 138.89 TRY; without shipping 116.67 TRY; shipping impact 22.22 TRY.

Example 3 — a loss: product 50, shipping 20, packaging 5 TRY, commission 50%, sale price 100 TRY: contribution −25.00 TRY (margin −25%); a minimum price of 150.00 TRY is needed to break even.

How to read the result: contribution is what is left per item at the current price after commission and variable costs; if negative, each sale loses money. The minimum sale price is the lowest price that delivers the target contribution; if your price is below it, the campaign does not pay for itself. The shipping price impact is the amount you must add to the price because of free shipping, and it exceeds the shipping fee because of commission.

How to use

  1. Enter product, shipping and packaging cost.
  2. Enter the marketplace commission rate and the current sale price.
  3. Enter a per-item target contribution, or leave 0 for break-even.
  4. Press Calculate.

Notes

Amounts are rounded HALF_UP to 2 decimals. Commission is charged on the sale price and must be below 100%. The no-shipping minimum price assumes a shipping cost of 0. Contribution is before tax and excludes fixed costs.

Sources

Frequently asked questions

5 questions

  1. (Product + shipping + packaging) ÷ (1 − commission rate). With 15% commission, a cost of 135 TRY needs 135 ÷ 0.85 = 158.82 TRY.

Next step

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