Definition
A price floor is the lowest price you are ever willing to accept for a specific listing — the hard stop that keeps automated repricing from eroding your margin. Unlike a sitewide minimum, a per-item floor is calculated from that listing's actual costs: what you paid, what shipping costs, what eBay takes, and what margin you require. Get the formula right once per SKU and every future price drop is bounded. Undercut enforces that floor automatically, so competing on price never means selling at a loss.
A defensible per-item floor has four components, not one. The formula is:
Floor = (Item Cost + Shipping Cost) / (1 − eBay Fee Rate) / (1 − Minimum Margin %)
eBay's combined fee rate (final value fee + insertion fee + payment processing) typically lands between 12.9% and 15.55% depending on category and seller level. A conservative default is 13.25%. Minimum margin is whatever you decide — 15% is a common starting point for resellers who need to cover returns and storage.
Suppose you source a used kitchen gadget for $8.00. You ship it via USPS Ground Advantage for $4.00. Your eBay fee rate in the Home & Garden category is 13.25%. You want a minimum 15% net margin.
Step 1 — Add hard costs: $8.00 + $4.00 = $12.00 Step 2 — Gross up for eBay fees: $12.00 / (1 − 0.1325) = $13.83 Step 3 — Gross up for margin: $13.83 / (1 − 0.15) = $16.27
Your floor is $16.27. Round up to $16.29 or $16.99 for psychological pricing — but never below $16.27. If a competitor lists at $14.99, Undercut holds your listing at $16.27 and you simply do not chase that sale. That is the point: some sales are not worth taking.
Auto-repricing without a floor is a race to zero. The repricer sees a lower competitor, drops your price, the competitor drops again, and the loop continues until one seller sells below cost. A per-item hard floor breaks the loop at the right place — for you, not a competitor.
A floor does three things a sitewide minimum cannot: it accounts for the real cost of each SKU (a $3 item and a $30 item cannot share a floor), it absorbs fee-rate differences across categories, and it survives price changes in your cost of goods without a manual update — as long as you re-calculate when your landed cost changes.
When you connect Undercut, you set each listing's Floor Price in the dashboard — either by entering the floor directly, or by entering your cost and letting Undercut calculate it using your stored fee rate and margin target. From that point, the repricer checks the current lowest competitor price and sets your price to one cent below — unless doing so would breach your floor, in which case it holds at the floor.
On the Pro and Scale plans, per-listing AI aggressiveness tuning adjusts how quickly each listing moves toward its floor versus holding at a premium price point. This is useful in categories like electronics and collectibles where demand is inelastic — the lowest price does not always win the sale. The floor still holds regardless of which aggressiveness setting you choose; it is not a target, it is a hard stop.
Most floor errors come from leaving out a cost category or using a stale number. The most damaging mistakes:
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Start freeCan I set a different floor for each listing, or is it one number for my whole store?
Per-listing floors are the correct approach and what Undercut supports. A single store-wide floor ignores cost differences between SKUs. A high-cost item with a low sitewide floor will sell below cost; a low-cost item with a high sitewide floor will never compete. Set floors at the SKU level, calculated from each item's actual landed cost.
What happens if a competitor's price is already below my floor before I even list?
Undercut will list your item at your floor price rather than matching the competitor. You may not win the sale — but you will not lose money on it either. If this happens frequently in a category, it is a signal to revisit your sourcing costs for that SKU, not to lower your floor.
Do I need to include eBay's payment processing fee in my floor calculation?
Yes. eBay's quoted final value fee includes payment processing (formerly Managed Payments) in the blended rate. Check your Seller Hub fee schedule for your exact rate by category — it typically ranges from 12.9% to 15.55%. Using a flat 13.25% is a safe conservative default if you sell across multiple categories.
Should my floor change during a sale or promotional period?
Your floor should not change unless your underlying costs change. Promotional pricing is a decision about your target price, not your minimum. If you run a sale, you are choosing to price closer to your floor — but the floor itself stays fixed at the cost-plus-minimum-margin figure.
How does a price floor interact with the AI aggressiveness tuning on the Pro and Scale plans?
AI aggressiveness controls how quickly each listing moves toward its floor as it chases competitor price drops — but it operates entirely above your floor. A more aggressive setting means the listing closes the gap to the competitor faster; a conservative setting holds at a premium longer. Either way, the floor is a hard stop the algorithm cannot cross.
Related: How to Avoid Selling Below Cost on eBay · Repricing Without Losing Margin · What Is Repricing? · eBay Seller Fees Explained · eBay Repricing Best Practices