If I offer free shipping, how much do I need to raise the product price to keep my margin?

Why adding the shipping cost is not enough

When you add 25 to the price, the payment provider or platform takes its percentage of that 25 as well, and your margin shrinks because the price grew while the profit did not. The fix is to put shipping into the calculation before solving the price, not after.

Try the quick way to see the gap: 85.71 + 25 = 110.71. At that price the fees are 5.54 and profit after cost and shipping is only 20.17, a margin of about 18.2% instead of the 25% you planned.

The right calculation in two steps

1. In the Selling-price calculator, enter cost, fees and margin with no shipping, and note the price.
2. Type the shipping you will pay per order in the shipping field, and note the new price.
3. The difference between the two is how much the price must rise to keep your margin intact.

The rise is the same whatever the product

In both examples the price rose by about 35.7, even though one product costs twice the other. The rise equals the shipping cost divided by the share of the price left after fees and margin, here 25 ÷ 0.7. That is why free shipping hurts cheap products most: 35.7 on an item priced at 85 is a big jump, and on one priced at 170 it is far easier to absorb.

Decide on numbers, not enthusiasm

Once you see the new price, ask whether your customer will pay it. If not, there are options besides a higher price: free shipping above a minimum order value, or free shipping on selected products only. Remember too that the shipping cost itself may be charged on size rather than weight, so confirm it with the Volumetric shipping-weight calculator before building a price on it, since a shipping error grows in exactly the way shown above.