How to Price an eBay Item: The Break-Even Formula
A formula for the lowest price an eBay UK listing can sell at without losing money.
The break-even price is the lowest total a buyer can pay before the sale costs you money. This guide gives the formula for it and a worked example, then adds a profit margin and an ad rate.
The fees in this guide are the ones eBay UK charges business sellers. UK private sellers pay no final value fee, so a private seller breaks even when the price covers the cost of the item and the postage.
What comes out of a sale
- Your costs. What the item cost you, what the postage costs you, and packaging. These are amounts in pounds.
- Percentage fees. The final value fee for the category plus the 0.35% regulatory operating fee. Both are charged on the total amount of the sale, including postage. An ad rate or an international fee is added to these if it applies.
- The per-order fee. £0.30 on orders of £10 or less and £0.40 on orders above £10.
- VAT on the fees. eBay quotes its fees before VAT. If you are not VAT registered, each fee costs you 20% more than the quoted figure.
The formula
The total is what the buyer pays for the item and postage together. The fee rate is the percentage fees added together.
Break-even total = (costs + per-order fee) ÷ (1 − fee rate)
If you are not VAT registered, multiply the per-order fee and the fee rate by 1.2 before you use the formula.
The formula divides because eBay charges its fees on the selling price, not on your costs. Adding 12% to costs of £15.50 gives £17.36. The example below shows that the break-even price for those costs is £18.74.
A worked example
An item of clothing cost you £12 and costs £3.50 to post. Your costs are £15.50. The clothing rate is 11.9%. With the regulatory operating fee, the fee rate is 12.25%. You are not VAT registered.
- Fee rate with VAT: 12.25% × 1.2 = 14.7%
- Per-order fee with VAT: £0.40 × 1.2 = £0.48
- Break-even total: (£15.50 + £0.48) ÷ (1 − 0.147) = £18.73
eBay rounds each fee to the penny, so the first price that covers your costs is £18.74 for the item and postage together. At £18.74, eBay’s fees including VAT are £3.24 and you are left with £15.50. A VAT-registered seller who recovers the VAT breaks even at £18.12.
Adding a profit margin
A margin is your profit as a share of the total the buyer pays. To price for a margin, subtract it in the bottom part of the formula:
Target total = (costs + per-order fee) ÷ (1 − fee rate − target margin)
For a 20% margin on the same item: £15.98 ÷ (1 − 0.147 − 0.20) = £24.47. At £24.47 the fees with VAT are £4.08 and the profit is £4.89, which is 20% of £24.47.
Adding an ad rate
If you use Promoted Listings, add the ad rate to the fee rate. A 5% ad rate makes the fee rate 17.25%, or 20.7% with VAT. The price for the same 20% margin rises from £24.47 to £26.95. The buyer has to pay £2.48 more for you to make the same profit.
Fee rates to use in the formula
The table shows eBay UK’s final value fee for business sellers in the main categories. The fee rate columns add the regulatory operating fee. Use the last column if you are not VAT registered.
| Category | Final value fee | Fee rate | Fee rate with VAT |
|---|---|---|---|
| Phones, laptops, tablets and consoles | 6.9% | 7.25% | 8.7% |
| Vehicle parts and accessories | 9.5% | 9.85% | 11.82% |
| Books, music, films and video games | 9.9% | 10.25% | 12.3% |
| Collectables, toys, sporting goods, health and beauty | 10.9% | 11.25% | 13.5% |
| Clothes, shoes and accessories; home and DIY | 11.9% | 12.25% | 14.7% |
| Crafts, pet supplies and everything else | 12.9% | 13.25% | 15.9% |
| Jewellery | 14.9% | 15.25% | 18.3% |
Some categories charge a lower rate on the part of a sale above a set price. Phones and laptops are charged 3% above £1,000. Vehicle parts are charged 3% above £750. Jewellery is charged 4% above £1,000. If your item sells for less than that price, use the rate in the table. If it sells for more, the formula gives a fee slightly higher than the one eBay charges.
Why cheap items lose a larger share to fees
The per-order fee is the same on a £3 order as on a £10 order, so it is a larger share of the smaller one. The table shows eBay’s fees on a clothing sale at different order totals, before VAT.
| Order total | eBay fees | Share of the order |
|---|---|---|
| £3.00 | £0.67 | 22.3% |
| £5.00 | £0.92 | 18.4% |
| £10.00 | £1.53 | 15.3% |
| £10.01 | £1.63 | 16.3% |
| £20.00 | £2.85 | 14.3% |
| £50.00 | £6.53 | 13.1% |
| £100.00 | £12.65 | 12.7% |
On a £3 order, fees take 22.3% before postage, packaging and VAT. The per-order fee rises from £0.30 to £0.40 for orders above £10, so an order of £10.01 pays 10p more in fees than an order of £10.00.
The per-order fee is charged once per order, however many items are in it. Four £3 items sold in one order pay the per-order fee once. Sold separately, they pay it four times.
What the formula does not include
- Returns. A returned item costs you the outbound postage and often the return postage. If one sale in twenty is returned, add that cost to the other nineteen.
- Stock that does not sell. If you buy ten items and sell seven, the cost of the three unsold items has to come out of the seven sales.
- Your time. Photographing, listing and packing a £5 item takes as long as a £50 item.
Use the formula before you buy stock
Look up what the item has sold for on eBay. Put that price into the formula as the total and work back to the costs. The result is the most you can pay for the item and still break even. The fee calculator does the same sum for one listing.
Next guide
eBay Promoted Listings: What They Cost and How the Fee Works explains how the ad fee is charged and how to find the highest ad rate a listing can afford.
Fee rates are taken from eBay’s UK fee page for business sellers as last updated on 30 September 2026. They do not include shop subscriptions, seller-level discounts or surcharges, or international fees. eBay can change its fees at any time. The costs in the worked examples are made up for illustration. This guide is general information, not financial or tax advice. Check your eBay fee invoice before you make pricing decisions.