How the numbers are worked out
Profit is the selling price minus your cost. Margin divides that profit by the selling price, markup divides it by the cost. The calculator shows both so you can compare with suppliers, shops and marketplace fees that quote either one.
Pricing tips
- Add every cost you pay for the item, such as delivery, packaging and card fees, before you work out the margin.
- Decide your price from the margin you need, not from a markup you copied from someone else.
- For a sale, check the new margin with the discount calculator first.
Frequently asked questions
What is the difference between margin and markup?
Markup is profit as a share of cost: (price − cost) ÷ cost. Margin is profit as a share of the selling price: (price − cost) ÷ price. A 50% markup is only a 33.3% margin.
How do I price an item for a target margin?
Selling price = cost ÷ (1 − margin ÷ 100). For a cost of 700 and a 30% margin the price is 700 ÷ 0.70 = 1,000.
Is gross margin the same as net profit?
No. Gross margin only subtracts the direct cost of the item. Rent, wages, delivery, tax and fees come off after that to reach net profit.
Can the margin be 100%?
Not in practice. A margin of 100% would mean the item costs nothing. Markup can go above 100%, for example buying at 100 and selling at 250 is a 150% markup.