Guide
Most eBay sellers who lose money on a sale set a floor too late — after a repricer already chased a competitor into the red. The fix is not slowing down your repricer; it is doing the floor math before you automate anything. This guide gives you the exact formula: cost + fulfillment + eBay fees + minimum margin = hard floor. Once that number lives in your repricer, no algorithm, no competitor spiral, and no flash sale can force a loss. We'll walk through a real worked example so you can replicate it for every SKU in your catalog.
Automated repricing is designed to win sales by undercutting competitors. The problem is that "winning" is only profitable if there is a floor below which the tool refuses to go. Most sellers skip this step or set a floor based on gut feel — a round number that does not account for eBay's variable fee structure or the cost of the label. The repricer then does exactly what it is supposed to do: it beats the lowest price. When that lowest price is already below your break-even point, you are paying to ship something for free or worse.
The correct floor is not your cost. It is the minimum price at which the transaction leaves you with acceptable profit after every deduction. Use this formula: Floor = (Landed Cost + Fulfillment Cost) / (1 - eBay Fee Rate - Target Margin Rate). Breaking that down: Landed Cost is what you paid per unit including inbound shipping and any prep. Fulfillment Cost is the outbound postage or FBA-equivalent fee. eBay Fee Rate is your final value fee percentage for that category — typically 13.25% for most categories, lower for some like heavy equipment. Target Margin Rate is the minimum net margin you will accept, expressed as a decimal.
Worked example — a phone case: You source it for $8.00. Outbound shipping via USPS First Class costs $4.00. eBay final value fee for cell phone accessories is 13.25%. You want at least a 15% net margin.
Floor = ($8.00 + $4.00) / (1 - 0.1325 - 0.15) = $12.00 / 0.7175 = $16.72
You would set your hard floor at $16.72. At that price, after eBay takes $2.22 and shipping costs $4.00, you net $2.50 — exactly 15% of $16.72. Any automated repricer that hits this floor stops. It does not go lower, no matter what a competitor lists at.
eBay's fee structure is not flat. Using the wrong rate when calculating your floor means the number you enter is wrong before any sale happens. Check your specific category in eBay's fee schedule and use that rate, not a generic 13.25%. A few reference points as of mid-2025: Books, DVDs, and Music run 14.95% up to $7,500. Clothing, Shoes, and Accessories run 15% on most items under $2,000. Collectibles sit at 13.25%. Heavy machinery and industrial equipment can be as low as 2-3%. If you sell across multiple categories, you need a separate floor calculation for each one — a single blended rate will leave some SKUs underprotected.
Once you calculate a floor using the formula above, you enter it as the Hard Floor for that listing in Undercut. From that point, every reprice cycle — running every 15 minutes on both Pro and Scale — checks the competitor's current lowest price, calculates a target undercut, and then applies one rule before writing a new price: if the result is below your floor, the listing price is held at the floor instead. It does not reprice down. It does not match a competitor who is selling at a loss. It holds and waits for the market to recover.
This means you can run an aggressive repricing strategy — AI aggressiveness tuning on Pro and Scale — without the anxiety that aggression itself will cause a loss. The floor is not a suggestion; it is a hard constraint the algorithm cannot override.
A floor set in January may be wrong by March. Supplier invoices change, USPS postage rates update, and eBay occasionally adjusts its fee schedule. If any input to the formula changes, the floor is stale. The practical habit is to recalculate floors whenever you receive a new supplier invoice, after any eBay fee announcement, and once per quarter as a standard review. For high-volume sellers with hundreds of SKUs, the most efficient approach is to maintain a spreadsheet with the formula per category, recalculate floors there, and then update each listing's Floor Price in the dashboard. Keeping the math in your spreadsheet makes a quarterly floor refresh quick — you already have every new number ready to enter.
Start a 14-day free trial — no credit card required. Add your floor per listing, connect your eBay account, and let Undercut beat competitors without ever dropping below your break-even.
Start freeDrop your email — we'll send early access and founding pricing.
Does my floor need to include eBay's listing fee or just the final value fee?
For most sellers, listings are free (eBay includes a monthly allotment of zero-insertion-fee listings). Your floor calculation should focus on the final value fee, which applies to every completed sale and is the meaningful per-transaction cost. If you are in a category or volume tier where insertion fees apply, add that cost to your landed cost input in the formula.
What if a competitor lists below my floor and my listing stops selling entirely?
That is the correct behavior. If a competitor is selling below your calculated break-even, matching them means paying to fulfill orders. Your floor holds your price at the minimum profitable point. In some cases, a competitor is liquidating inventory or has a lower cost basis — neither situation justifies you selling at a loss. If the market stays depressed for an extended period, the right move is to review your supplier cost, not lower your floor.
How do I handle free shipping offers — does that change the floor math?
Yes. If you offer free shipping, the outbound fulfillment cost must still appear in your floor formula — it just moves from a line-item on the buyer's receipt to a cost you absorb. Use the same formula but treat your fulfillment cost as part of your landed cost input. The result will be a higher floor price than a listing where shipping is charged separately, which is accurate: free shipping listings need to price in that cost or they lose money.
Can I set one floor for an entire category instead of per SKU?
You can, but it introduces risk. A category-level floor is only safe if every item in that category has the same or lower landed cost and fulfillment cost as your most expensive SKU. In practice, items in the same category often have a wide cost spread. A per-SKU floor is more work to set up initially but is the only approach that reliably protects each listing. Undercut's per-listing Floor Price field makes per-SKU floor management practical even at high volume.
What margin percentage should I use as my minimum in the floor formula?
That depends on your business model. Most resellers targeting sustainable eBay income use 15-25% net margin as a floor minimum. If your business relies on high volume and thin margins, you might accept 10%. If you are selling unique or collectible items with low competition, 30%+ is reasonable. The key is that the number reflects an actual business decision, not an arbitrary guess — factor in the time you spend sourcing, listing, and handling returns when deciding what net margin is worth your effort.
Related: What Is a Price Floor? · eBay Seller Fees Explained · Repricing Without Losing Margin · Manual vs. Automated Repricing · eBay Profit Calculator