How do I compensate for fees to arrive at a desired sale price?

[Mayaj1]

Hi everyone,

Firstly I apologize as I suspect this question has been asked before but I don't know how to phrase it to find the solution. If you know the answer is posted somewhere else I am happy to be directed to that thread

I am creating a little formula to calculate the price of my products. I have worked out my costs, labour markups etc... And I know what price I need to receive to make the profit I desire. My problem is that on top of this I will be charged fees for selling my item (3.5%) and I want to know how much to charge to compensate for these fees.

e.g. I want to receive £10 for my product.
What formula do I need to use to calculate the price I need to charge to pay my 3.5% fees and still end up with £10?

I hope this is clear. I initially tried finding 3.5% of £10 and adding it to the £10 but soon realized that didn't work, as was more obvious with larger figures.

Thank you.

 

[ksdhart]

Sorry for the delay. Your post seems to have gotten lost in the shuffle. In any case, my advise would be to think about the problem in a more abstract manner, using algebraic principles. You don't know how much to charge for an item, so create a variable. Call it p for price. You'll be charged 3.5% of the price in fees, so that can be represented as 0.035p. Now, you want to find a price such that your net gain is exactly £10. Net gain is the sales price minus any fees, so your equation is then: p - 0.035p = 10. Solve that for p and you're good to go.

 

[Mayaj1]

Thank you both very much. That is exactly what I needed. So simple when you know, but for the life of me I couldn't get my head around. I was so focused on directly using 5% I wanted to account for, rather than using the 95%.

Anyway I have incorporated this into my database formula and I will add the equation to my "little book of equations" so I don't bother anyone again in future