B&Q Marketplace
Tesco Marketplace
The Range Marketplace
Argos MarketplaceBreak-even is the lowest price at which a sale covers your cost price, delivery and the marketplace's commission, and leaves nothing over. If you're VAT-registered, take the VAT out of the selling price first. Then divide your costs by what's left of each pound after VAT and commission. Work it out per product, per marketplace category.
Key takeaways
- Break-even depends on your cost, your delivery cost, the commission rate and VAT, so it's different for every product and category.
- For a VAT-registered seller, a sixth of a VAT-inclusive price goes to HMRC before commission is even taken.
- Check whether your contract charges commission on the VAT-inclusive price and on delivery, because it changes the answer.
- Set your floor price a margin above break-even, not at it.
What is break-even on a marketplace?
Your break-even price is the selling price at which an order makes exactly nothing: the money you keep covers what the product cost you, what it cost to deliver and what the marketplace took, with nothing left. Sell above it and you make a profit. Sell below it and every order loses money, however good the sales figures look.
On a Mirakl marketplace, the retailer takes a commission: a percentage of each sale, deducted before your payout. Mirakl is the platform behind the marketplaces on B&Q, Tesco, The Range and Argos. Commission is why the same product can be profitable on one marketplace and loss-making on another at the same price.
Our earlier worked examples, in the guides to the PayBox and selling on B&Q, left VAT out to keep the arithmetic short. This guide puts it back in, because for most sellers it's the biggest number in the calculation after the cost price.
What goes into the break-even calculation?
- Cost price: what you pay for one unit, before VAT if you're VAT-registered.
- Delivery cost: what you pay the courier for one order, plus packaging if it's material.
- Other per-order costs: a returns allowance, or a fulfilment fee if a third party picks and packs for you.
- Commission rate: the percentage for that product's category on that marketplace.
- VAT: the standard UK rate is 20%, so a sixth of a VAT-inclusive price is VAT if you're registered.
Leave out costs that don't change with each order, such as rent, salaries and software. They matter for whether the business makes money overall, but they don't change whether one more sale at a given price is worth having.
How is commission set on B&Q, Tesco, The Range and Argos?
None of the four publishes a rate card. Each sets commission by category or by contract, so you need your own rates from your seller agreement before you can work out break-even:
| Marketplace | How commission is set | Where to find your rate |
|---|---|---|
| B&Q (diy.com) | By category, agreed when you join | Your seller agreement with B&Q |
| Tesco | By category, confirmed when you're approved | Your Tesco approval and agreement |
| The Range (Range Plus) | By category | Your Range Plus seller agreement |
| Argos | Set in each Trusted Seller's contract | Your Argos contract |
Two details in the contract matter as much as the rate: whether commission is charged on the VAT-inclusive price or the price before VAT, and whether it's charged on any delivery fee the shopper pays. If you aren't sure, ask your account manager, then look at the commission on a few real order lines in your seller portal to confirm it.
What is the break-even formula?
If you're VAT-registered and commission is charged on the VAT-inclusive price:
- Add up your per-order costs before VAT: cost price, delivery and anything else.
- Work out what you keep from each £1 of selling price: £1 ÷ 1.2 for VAT, which is about 83.3p, minus the commission rate.
- Divide your costs by that figure. The answer is your break-even price, including VAT.
If commission is charged on the price before VAT, the second step becomes (£1 − the commission rate) ÷ 1.2 instead. If you aren't VAT-registered, you don't take VAT out of the selling price, but you can't reclaim the VAT you pay either, so use your costs including VAT and divide by £1 minus the commission rate. VAT registration is compulsory once your taxable turnover passes £90,000 in a rolling 12 months.
The marketplace normally adds VAT to its commission invoice. A VAT-registered seller can usually reclaim that as input tax, so use the commission rate before VAT. If you can't reclaim it, add it in.
What does a worked example look like?
Worked example (made-up figures). You sell a table lamp at £59.99, including VAT. It costs you £30 and delivery costs £4.50, both before VAT, so your costs are £34.50. Commission in the category is 15% of the VAT-inclusive price. Of each £59.99 sale, £10.00 is VAT and £9.00 is commission, leaving you £6.49 profit. Break-even is £34.50 ÷ (0.8333 − 0.15) = £50.49.
Here is the same lamp worked out three ways. Only the first is right:
| Method (made-up figures) | Break-even price | Profit or loss if you sell at that price |
|---|---|---|
| Commission on the VAT-inclusive price, VAT taken out | £50.49 | Nil |
| Commission on the price before VAT, VAT taken out | £48.71 | A loss of £1.21, if your contract actually uses the VAT-inclusive price |
| VAT forgotten: £34.50 ÷ 0.85 | £40.59 | A loss of £6.76 a sale |
Forgetting VAT puts the floor almost £10 too low. If a rival lists at £44.99 and you match them, it looks like a profitable move on paper and loses about £3.76 on every order in practice.
Should your minimum price be your break-even?
No. Break-even is the line you must never cross, not the price you aim for. Set your minimum price (your floor) a margin above it, so that winning the PayBox at your floor still earns something. A common way is to add the profit you need per order to your costs before dividing.
Continuing the example (made-up figures). You want at least £3 a sale. (£34.50 + £3) ÷ 0.6833 = £54.88, so your floor is £54.88. At that price you make £3.00 after VAT and commission.
Recalculate when anything in the formula changes: a supplier price rise, a new courier rate or a commission change in your contract. A floor set in spring can be under break-even by autumn without anyone touching it, which is why a Mirakl repricer should check break-even before every price it sends.
Why is break-even different on each marketplace?
The cost price and the courier are the same wherever you sell, but commission isn't. A product in a 12% category on one marketplace and a 20% category on another has two break-even prices, and a floor copied from one to the other can be wrong. Delivery can differ too, if one marketplace expects faster dispatch or a different service. Keep a break-even for every product on every marketplace, as covered in our guide to managing several Mirakl marketplaces.
How PriceSynergy works out break-even for you
PriceSynergy reads the commission on every order line from Mirakl and works out break-even using each marketplace category's commission rate. Import your cost prices, delivery costs and lead times once, from a pre-filled template of your own products, and it shows gross margin after commission on every order line and flags products selling below break-even.
You can set min and max prices from cost for a whole selection, for example cost plus 10% and cost plus 25%, with VAT and the marketplace's commission covered, and preview every offer first with any floor below break-even shown in red. Every product page has a what-if calculator, and every suggested price is checked against your min, max and break-even. On Growth and Scale you can send approved prices to Mirakl, and a price that would sell at a loss is never sent. See margin-safe pricing or the plans.
Questions sellers ask
What is break-even price on a marketplace?
It's the selling price at which an order covers your cost price, delivery and the marketplace's commission and leaves no profit. Below it, every sale loses money.
Do I include VAT when working out break-even?
Yes, if you're VAT-registered. A sixth of a VAT-inclusive selling price at the 20% standard rate goes to HMRC, so take it out before you compare the price with your costs.
Is marketplace commission charged on the price including VAT?
It depends on your contract, so check it and confirm against a few real order lines in your seller portal. Commission on the VAT-inclusive price gives a higher break-even than commission on the price before VAT.
Where do I find my commission rate on B&Q, Tesco, The Range or Argos?
In your seller agreement. B&Q, Tesco and The Range set commission by category, and Argos sets it in each Trusted Seller's contract. None of them publishes a rate card.
How much above break-even should my minimum price be?
Enough to leave the profit you need on each order. Add that profit to your costs before dividing, and recalculate whenever your cost price, courier rate or commission changes.
Sources: GOV.UK: VAT rates; GOV.UK: VAT registration thresholds; GOV.UK: Reclaiming VAT; Kingfisher Merchant Hub: sell on B&Q; ChannelEngine: B&Q marketplace guide; ChannelX: Tesco Marketplace to replatform to Mirakl; ChannelEngine: The Range marketplace guide; Sainsbury's: Argos is building a marketplace (February 2026). Marketplace names are trademarks of their owners. PriceSynergy is independent and isn't endorsed by any marketplace.