Most digi-art designers will tell you that selling products through PayPal is rather easy to set up. But it can be a little challenging to determine what your take home pay will be. The variables to consider are of course the PayPal fees, but also the commission amounts being paid through consignments shop sales as well. That’s where it gets a little tricky.

I’ve created a trio of calculators that will tell you in a snap the profit information you desire. I put the required formulas into an Excel Spreadsheet and have made it available for download through our business network. If you haven’t already joined, here’s another great reason to come aboard. Handy little tools like this can be such a time saver! If however you prefer to calculate the info yourself, here’s three different scenarios for you to consider:

Solo-Preneur Selling From Your Own Store

You’ve taken the time to set up your own shop and it’s time to set product prices. But how much will you make when selling through PayPal? Since you aren’t paying commissions to anyone, let’s just say your only expense is your PayPal account fees. The most-often used PayPal account level are the standard and pro account levels. Both have the same fee structure of 2.9% + 30-cent fee for a single sale.

To figure out your PayPal fees for a particular sale, you multiply your retail price by 2.9%, then add 30-cents to that amount. Then to determine your profit you deduct your PayPal fees from the retail price. For example the calculations for a $2 sale would be: (2.-(2.00 *.029)+.30). Telling you that $1.64 will be your profit after the sale.

Looking at it backwards the question would be if you desire to earn $2 off the sale of this item, taking into consideration your PayPal fees, how much do you need to charge? To figure this you first add 30-cents to the desired profit amount. Then divide that amount by .971 (the amount of the retail price you keep after the 2.9 PayPal percentage is taken out). For example if you want to make a $2 profit your calculations would be: ((2.00+.30)/.971). The answer to your question is $2.37 is the retail price you need to charge for the product in order to get a $2 profit from the sale of this single item.

Note that the 30-cents processing fee charged by PayPal is per sale, not per item on the receipt and it’s deducted AFTER the 2.9% is figured. So if your customer purchased several products that added up to more than $2.37 for the total bill, your profit would be different. To make the calculations easy for you to see in my example we’re assuming the purchase is for a single item only.

If you are a solo-preneur selling from your own store, I hope you’re using a blog based shopette provided through DSD-Pro! With that little hint dropped, let’s move onto the calculations for those of you who sell through a consignment store.

Designer Selling Through a Consignment Store

This is the easiest one to figure, but it also results in the lowest payout. To figure the profit on any item you sell, simply multiple the retail amount by the commission percentage. For example, if you make 20% through the store and you sell your product for $2 you will make 40-cents on the sale. The calculation is (2.00*.20) giving you .40 for profit. To figure the retail price needed to make a certain profit you would divide the desired profit amount by the commission percentage. So if you get a 20% commission and you want to make a $2 profit your retail price will need to be set at $10. The calculation is simply (2.00/.20) .

Using the DSD-Pro calculator tool you can also see how much of the sale goes to the store owner. Which in this case, using the first example with the $2 sale the store owner made $1.24 after paying out the PayPal fees (36-cents) and your commissions (40-cents). In the second example with the $10 sale, PayPal received 60-cents. Commissions paid to you were $2 and and $7.41 went to the store owner.

After reading these first two scenarios you may have figured out how to calculate the profits for a consignment store owner. If not - then it’s time for you to stop fiddling around with the numbers and log into our business network to grab the calculator tool for yourself. However, if you still prefer to do it yourself - I’ll tell you how it’s done.

Consignment Store Owner Selling Commissioned Products

If you have a $4 product with a 30% commission attached to it, how much will you make from your sale after paying PayPal fees and your artist commissions? To figure this one out you determine the PayPal fees and commission rates based off the $4 retail price. Then deduct this amount from the retail price. The calculations would be: (4.0-((4.0*(.30)+((4.*.029)+.30))) which would result in you paying out a $1.20 commission to your artist, 42-cents to PayPal, and keeping $2.38 for the store.

Let’s turn the business question around the other way. What’s the retail price I need to ask for if I want to make a $4 profit? Using the same 30% commission payout for your designer, the answer would be $6.41. The calculation involves adding 30-cents to your desired profit amount, figuring your commission and PayPal percentage fee based on that amount. Then dividing the desired profit by the total of those fees. The equation for this example would be: ((4.00+.30)/.329) which would result in you setting your retail price at 6.41, then paying out a $1.92 commission to your artist, 49-cents to PayPal, leaving you with your desired $4 profit.

Did You Get All That?

Now I guess you can see why a set of calculator tools would be so much easier than figuring this out on your own for each product you sell! Using the spreadsheet, you simply punch in any artist commissions that might apply, then use whichever calculators you want to figure your profits. These are great tools for any digi-scrap artists who sell their products in an online store using PayPal (USA dollars). Hope you find them helpful. I’d love to hear what you think!

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