The 3x rule works until it doesn't
Take a $3.50 silicone pet-feeding mat from Yiwu. The standard advice is to triple it, list at $10.50, call it a day. Then the real numbers show up: $1.20 freight to the buyer's country, 6.5% duty on the CIF value, and if the buyer is in the UK, 20% VAT on top of the duty-paid figure. The actual cost to land one mat is about $5.36 — so at $10.50 you're keeping $5.14, which is a 49% margin, not the 66% that "triple the cost" implies. The rule of thumb didn't lie exactly; it just never counted the tax you never see on your own invoice.
That's what this calculator replaces. It walks the chain the way the money actually moves: CIF (cost plus freight and insurance), duty on CIF, sales tax on the duty-paid value, and the landed cost that is your real floor. The suggested price is then one division — landed cost ÷ (1 − margin) — and the profit is what's left. The whole point of doing it on one screen is that the assumptions stop hiding from you.
Which number to put in each box
The purchase cost is what you actually pay to get the goods to the shipping point. If you dropship, that's the supplier's dropship price, not the wholesale price — the difference is real, and it's your margin. Freight plus insurance is the per-unit share of your shipping bill; if you move consolidated containers, divide the total freight by the units in the container, don't guess. The duty rate is the one number worth looking up instead of estimating: it's set by the product's 10-digit HTS line in the destination country, and the tariff lookup gives you the MFN figure. For goods from China, add the Section 301 surcharge to that MFN rate — the 301 guide shows which list applies. If your parcels clear under a de minimis threshold, the duty box is simply zero; the threshold map tells you where that holds, and the dropshipping duty guide explains who actually ends up paying when the parcel lands.
The sales-tax box is where the country changes the answer. The US charges no VAT at the border, so zero is right. The UK applies 20% from the first pound on commercial imports; EU member states run 19–22%. When you sell DDP to consumers, that tax is collected at checkout — by the marketplace, or by you as the registered seller — so it's not a cost you eat, but it is part of the price the customer sees, and that's exactly why it belongs in the pricing formula. The VAT calculator has the per-market rates.
Margin is a slice of the price, not a markup on cost
The difference matters more than it sounds. Marking up a $5.36 landed cost by 40% gives you $7.50 — a 28.5% margin. Dividing by 0.6 to land a true 40% margin gives you $8.93. On 1,000 units a year, the gap between those two interpretations is $1,430 of profit that existed or didn't depending on how you did the arithmetic. Every pricing webinar says "40% margin"; almost none of them specify that the margin is 40% of the selling price. This calculator uses the conservative version, the one that survives a spreadsheet audit.
What it doesn't include is just as important as what it does. Marketplace referral fees — 15% on Amazon — payment processing, advertising, returns, failed deliveries: none of that is in the formula. On a $14.95 price, Amazon's referral fee alone is $2.24, which is more than the duty on most consumer goods. The reliable sequence is to run this screen for the floor, then stack the platform fees on top before you call a number final. Sellers who skip that second step are the ones who discover, at the first settlement statement, that the margin was a mirage.
One check before you trust the output: the margin is a target, not a promise. If the suggested price lands above what the market will bear, the calculator hasn't made a mistake — it has told you the product doesn't work at that margin. Lower the target or drop the product; don't talk yourself into the wrong math.
Frequently Asked Questions
What's the difference between this and the landed cost calculator?
Direction. The landed cost calculator compares one shipment across destination markets to see what importing costs. This one takes a single per-unit cost and works forward to a suggested selling price and margin — the calculation a seller does when pricing a listing, not when comparing trade lanes.
Should I include VAT in my selling price?
Yes. On DDP sales to consumers, the customer pays one price and you remit the tax from it. Whether you show the VAT as a line item or absorb it, the customer's willingness to pay is a single number, so the tax belongs inside the price you test. This calculator puts it in the landed cost, which is the honest way to model it.
My orders are under the de minimis — what do I enter for duty?
Zero. If the destination waives duty below its threshold (US $800, UK £135, EU €150) and your per-parcel value stays under it, no duty is due — though the sales-tax box is a separate question, and in the UK and Australia the seller may still have a VAT registration obligation even at zero duty. The dropshipping duty guide walks each destination, because "under the threshold" is not the same as "no tax anywhere."