Ecommerce & selling
Ecommerce & marketplace profitability
Marketplace selling looks simple until the fees land. Between referral fees, fulfilment, payment charges, shipping and returns, the price on the listing is a long way from the profit in your account. Pilot works backwards from the margin you want to the price you must charge.
Problems this solves
- You need the selling price that hits a target margin after fees.
- You want to know a product’s real profit once fees are removed.
- You need to compare two sourcing options on net margin.
- You want to test how a fee or cost change affects profit.
Questions you can ask Pilot
How Pilot works this out
For a target margin, Pilot solves price = cost ÷ (1 − margin). It starts from your unit cost and target gross margin, then lets you layer marketplace and per-order costs as follow-up scenarios so you can see net as well as gross.
For profitability, it subtracts cost and each fee from the selling price to show gross profit, margin and markup. Fees you do not supply are excluded and clearly noted rather than assumed.
Sourcing comparisons reuse the landed-cost engine per option, so a China-vs-Vietnam question is answered on landed cost and resulting margin, not on sticker price.
The variables that matter
- Unit cost
- Ideally the landed cost, not just the supplier price.
- Target margin
- Gross margin measured on selling price.
- Marketplace fees
- Referral, fulfilment and payment charges as a percentage or fixed amount.
- Per-order costs
- Shipping, packaging and expected returns.
Worked examples
“35% margin on a $12 item”
Pilot returns a minimum price of about $18.46, then invites you to add a marketplace fee to see the net picture.
“Profit at $22 sell, $8 cost”
Gross profit $14, margin ~63.6%, markup 175% — before fees, which you can subtract as a follow-up.
Common mistakes
- Using supplier cost instead of landed cost as the base.
- Quoting gross margin while ignoring marketplace and payment fees.
- Forgetting returns and shipping, which can turn a thin margin negative.
Limitations
- • Fee structures differ by marketplace and category; Pilot uses the figures you supply.
- • Currency and payout timing effects are not modelled by default.
- • Advertising cost (ACoS/TACoS) must be added explicitly.
Verify before relying on this
- • Confirm current fee percentages for your marketplace and category.
- • Base the calculation on landed cost, not invoice price.
- • Include a realistic returns rate for the product.
Official source categories
Frequently asked questions
How does Pilot find the price for a target margin?
It divides your cost by one minus the margin. Because gross margin is measured on price, this gives the minimum price before fees, which you can then adjust for marketplace charges.
Can Pilot compare sourcing countries?
Yes, by running the landed-cost calculation for each option and comparing the resulting margin. You supply the supplier prices and duty rates to confirm.