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Margin & Markup Calculator

Turn a cost into a price, or a price into a margin. It shows margin and markup together every time, because they are different numbers and pricing off the wrong one is the quiet way to lose money on every sale you make.

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£

What you paid for the item itself — trade price, or what it cost to make.

£
Refine
£

Postage, packaging, the label. Anything you pay per unit. It is added to the cost, so every percentage below is measured against the total rather than the trade price alone.

Loaded with an example. Type over any field.

Gross margin

38.3%

Selling at £29.99 keeps £11.49 a unit — 38.3% of what the customer pays (healthy)

Profit per unit
£11.49
Total cost
£18.50
Price
£29.99
Markup
62.1%

The working

  1. Profit: £29.99 − £18.50 = £11.49
  2. Margin: £11.49 ÷ £29.99 = 38.3%
  3. Markup: £11.49 ÷ £18.50 = 62.1%

No platform fees, no payment fees and no VAT. The profit calculator takes those off for eBay, Amazon and Shopify.

Margin to markup, at a glance

The two drift further apart the higher you go. At a 50% margin you have to double the cost; at 75% you have to quadruple it.

Equivalent markup and multiplier for each gross margin
MarginSame as a markup ofMultiply cost by
5%5.3%1.05×
10%11.1%1.11×
15%17.6%1.18×
20%25.0%1.25×
25%33.3%1.33×
30%42.9%1.43×
40%66.7%1.67×
50%100.0%2.00×
60%150.0%2.50×
75%300.0%4.00×

Check this before you rely on it. A free everyday calculator, provided as a guide — not tax, accounting, financial or legal advice. The working is shown above so you can verify it against your own figures. See our terms of use.

How it works

STEP 1

Say what you already know

A cost and a price, if you are checking something you already sell. A cost and the margin or markup you are aiming for, if you are setting a price for the first time.

STEP 2

Add anything else per unit

Postage, packaging, the label. Under Refine, and it folds into the cost — so the percentages you get back are measured against what the unit really costs you, not the trade price alone.

STEP 3

Read both percentages

Margin is your share of the price. Markup is what you added to the cost. A 50% markup is only a 33.3% margin, and the gap widens the higher you go.

What this doesn't cover

Knowing where a calculator stops is what makes the rest of it trustworthy.

  • Platform and payment feesNothing is taken off for eBay, Amazon, Shopify or a card processor. This is the margin before anyone else takes their cut — the profit calculator handles that side.
  • VATFigures are treated as VAT-exclusive throughout. If your prices include VAT, take it off first with the VAT calculator, or the margin will read higher than it is.
  • OverheadsRent, software, your own time and anything else not tied to the unit. This is gross margin — net margin is what is left after those, and it is always lower.
  • Returns, discounts and shrinkageThe figures assume every unit sells once, at the price shown. Refunds, sale prices and stock that never sells all pull the real average down.

Common questions

What is the difference between margin and markup?

What you divide the profit by. Margin divides it by the price — it is your share of what the customer pays. Markup divides it by the cost — it is what you added on top. Buy at £10, sell at £15, and you have made £5: that is a 50% markup on the cost but only a 33.3% margin on the price. Same £5 either way; two very different-sounding numbers.

How do I calculate margin?

Margin = (price − cost) ÷ price × 100. So £29.99 selling on an £18.50 cost is £11.49 ÷ £29.99 = 38.3%. The division is by the price, not the cost — that is the step people get wrong.

How do I price for a margin I want?

Divide, do not multiply. Price = cost ÷ (1 − margin). For a 40% margin on an £18.50 cost that is £18.50 ÷ 0.60 = £30.83. Multiplying by 1.40 instead gives £25.90, which is a 40% markup and only a 28.6% margin — you would be giving away about a pound a unit without noticing.

Why can’t I have a 100% margin?

Because a 100% margin means the whole price is profit, which means the item cost you nothing. As the target approaches 100% the price you would need runs away to infinity — 90% needs ten times the cost, 99% needs a hundred times. The calculator refuses 100% and above rather than showing you a number that cannot happen.

Is this gross margin or net margin?

Gross. It counts what the unit costs you and nothing else. Net margin also takes off overheads — rent, subscriptions, your time — and is always the smaller of the two. Gross margin is the right number for pricing a product; net margin is the right number for judging the business.

What is a good margin?

It depends entirely on what you sell. Grocery runs on a few percent and survives on volume; software and jewellery run on 70% or more. For physical products sold online, 30% and up gives you room to discount, absorb a return and still make money — under 15% and a single refund can wipe out several sales. The calculator labels the result so you can see where you sit.

Should I include postage in the cost?

If you pay it, yes — put it under Refine as an other cost. Postage you charge the customer separately and pass straight on is neither cost nor profit, so leave it out of both. What you must not do is ignore postage you actually absorb; on low-value items it is often the difference between a margin and a loss.

Why is my margin lower than this once I sell on eBay or Amazon?

Because they take a cut of the sale, and this calculator deliberately does not model that. A 38% margin here is more like 25% once a marketplace fee, a payment fee and the VAT on those fees come off. The profit calculator does that platform by platform.

Related calculators

Profit Calculator

Your real margin on eBay, Amazon and Shopify after every fee each one takes.

VAT Calculator

Add or remove VAT at 20%, 5% or a rate you set.

Percentage Calculator

Percentage of a number, increase, decrease and difference.