How to use
- Profit & margin: enter your unit cost, selling price and platform fee to get profit per unit, margin and markup.
- Target margin → price: enter the cost, the margin you want and the fee to get the selling price that delivers it.
- If your selling price includes VAT or sales tax, tick Price includes VAT/sales tax and enter the rate. Revenue is then the price with the tax taken out.
The fee is calculated on the full selling price the customer pays. If you also pay a payment-processing or advertising percentage, add it to the fee.
Margin vs markup
Both describe “how much you make”, but they divide by different things.
| Measure | Formula | Cost 60, price 100, no fees |
|---|---|---|
| Margin | profit ÷ selling price × 100 | 40 ÷ 100 = 40% |
| Markup | profit ÷ cost × 100 | 40 ÷ 60 = 66.7% |
To convert: margin = markup ÷ (1 + markup) and markup = margin ÷ (1 − margin). A 50% markup is a 33.3% margin; a 50% margin is a 100% markup.
Pricing for a target margin
Selling price = cost ÷ (1 − target margin − fee rate)
With a cost of 60, a 30% target margin and a 10% fee, the price is 60 ÷ 0.6 = 100. The fee takes 10, leaving a profit of 30 — exactly 30% of the price.
The classic mistake is adding 30% to the cost. Selling at 60 × 1.3 = 78 leaves 78 − 7.80 fee − 60 = 10.20 profit, a margin of only about 13.1%. If the margin and fee rates add up to 100% or more, no price can reach the target.
Tax-inclusive prices
If a price of 120 includes 20% VAT, revenue is 100 and the VAT is 20. A 10% fee on the 120 the customer pays is 12, so with a cost of 60 the profit is 28 — a 28% margin.
VAT-registered businesses can usually reclaim the VAT they pay on purchases, so enter the cost without that tax. Use the VAT calculator to split out tax on its own.
Things to watch
- Shipping, returns, packaging and tax charged on the fees themselves are not included. Convert them to a per-unit amount and add them to the cost.
- Marketplace fees vary by category and fulfilment option, so check your seller account’s fee schedule.
- To see how a promotion eats into margin, find the sale price with the discount calculator and enter it here.
FAQ
For a 30% margin, can I just add 30% to the cost?
No. That is a 30% markup, which is about a 23.1% margin. For a true 30% margin with no fees, divide the cost by 0.7.
Can margin be more than 100%?
Not while the cost is above zero, because margin divides profit by the selling price. Markup is measured against cost, so it can exceed 100% or 200%.