How do you price sales with free delivery and not lose out? Calculator

Free delivery free delivery is nowadays a standard in e-commerce - customers expect it and often choose offers that provide it. However, there is always someone paying for „free delivery” - and most often it is you, the seller. So how do you price your sales to make money, even though you have to deduct delivery costs, marketplace commission and still generate a profit from each transaction?

This article will help you to put the topic of selling prices in context:

• commission costs (e.g. Allegro, eBay, Amazon),
• free delivery included in the price,
• expected profit.

Free delivery is not a gift - it's a strategy

If you offer free shipping, you must include the cost in the gross price product. The customer does not pay separately for shipping, but you still bear this cost. This means that the selling price must cover:

• cost of purchasing goods,
• cost of order fulfilment (packaging, label, courier),
• the commission charged by the platform (e.g. 10-30%),
• Your profit.

What does this look like in practice?

Suppose:

• the cost of purchasing the product: PLN 30,
• postage + packing: PLN 10,
• commission: 20% on gross selling price,
• you want to achieve 15% selling price profit.

So your total costs are:
30 zł (product) + 10 zł (shipping) = 40 zł

The selling price (X) you must establish so that:

X-(commission⋅X)-40=0,15⋅X

Let us simplify:

X⋅(1-0,20-0,15)=40⇒X⋅0,65=40⇒X=400.65 ≈ 61.54 PLN

That is, the sale price should be around PLN 61.54, to meet your objectives.

The more products in the basket, the greater the profit

One other thing is worth remembering: every additional product in your order with free delivery increases your profitability. Why?

Because you only incur the cost of shipping and packaging once - regardless of whether the customer buys 1, 2 or 5 products. Additional products no longer generate a separate shipping cost, and it is easier to „dilute” the commission and unit cost into a larger order value.

This is why promotions like:

• „Buy 2 and get the third product for half price”.”
• „Free delivery from £100”
• „Order more, pay less per item”.”

From a logistics and margin point of view, this is pure profit.

Ready-to-use formula for self-calculation

If you want to automate these calculations, use this formula:

Example for Excel:

= (B2 + C2) / (1 - D2 - E2)

Where:

• B2 = purchase cost (e.g. 30)
• C2 = shipping cost (e.g. 10)
• D2 = commission as a fraction (e.g. 0.20)
• E2 = profit as a fraction (e.g. 0.15)

Practical tips

• Test the psychological price - e.g. consider £59.99 instead of £61.54, if the margin allows it.
• Include VAT and different tax rates, If you sell internationally. It is best to price according to the net price and then add the tax applicable in the country concerned.
• Plan the margin spread, in order not to sell below cost during promotions or discounts.
• Beware of double commission - Some platforms (e.g. Allegro Smart) also charge a commission on the cost of shipping, even if it is „free” in the form of SMART surcharges. Such a surcharge should then be included in the price of the product, which will increase our gross price, but also the commission.

Summary

In e-commerce, every penny matters. Offering free delivery increases conversions, but you need to be aware of how it affects your margins. When setting your selling price:

- add all real costs,
- include commission as a percentage of the gross price,
- establish a realistic level of profit,
- recalculate - don't guess!

Every additional product in the basket is your advantage - because the logistics don't multiply and the profit increases.

Our examples for Excel, downloadable : ) ↓
Price Calculator_Sales_Blog.xlsx

Author: Adrian Śmigiel

Date of publication: 16.07.2025r.