The formula
If the place you sell takes a percentage of each sale, a break-even price has to cover that percentage too:
Break-even price = total cost per item ÷ (1 − fee %)
Worked example
Say one item costs you £12.00 to make, counting materials, your time, packaging and a share of overheads. Your selling channel takes 8% of the sale price (an example figure, so check your own fees).
£12.00 ÷ (1 − 0.08) = £12.00 ÷ 0.92 = £13.04
Check: 8% of £13.04 is about £1.04, leaving £12.00, which is exactly your cost.
Why not just add 8% to the cost?
£12.00 + 8% = £12.96. The fee is taken from the selling price, not your cost, so 8% of £12.96 is £1.04 and you keep £11.92. That's 8p short on every sale.
Break-even is a floor, not a price
Selling at break-even pays for your time only at the hourly rate you put into your costs. It leaves nothing for slow months, growing the business or mistakes. Use it as the lowest price you'll accept, then set a price above it.
Fixed per-order fees (a flat charge per sale) need adding to your costs before dividing. VAT and income tax aren't included here.
Try it with your own numbers in the free CraftMargin calculator. It works without an account.