How do I calculate a selling price from a margin?

Divide your cost by one minus the margin. For a cost of 800 and a 20% margin, the price is 800 divided by 0.8, which is 1,000. If you also pay a payment fee as a percentage, subtract that percentage from the bottom of the sum as well. This calculator does it for you.

Free Profit Margin and Selling Price Calculator

Q: Why is my real margin lower than I expected?

Usually because of costs that are easy to forget: payment or marketplace fees, packaging, delivery, and VAT mixed into the selling price. Fees are often charged on the full amount the customer pays, including VAT.

Currency Buying price (what one item costs you) If you can claim back VAT on purchases, enter the price without VAT.

I want to hit a target Target (%)

Margin is profit as a share of the selling price. Markup is profit as a share of all your costs. Round the shelf price up to the nearest

Tax and costs

Everything here is optional. Leave a box empty if it doesn't apply.

VAT or sales tax (%) Payment or marketplace fee (%) Fixed fee per sale Other costs per item

If you sell this many (optional)

Margin questions, answered

The difference between margin and markup, where the money goes, and why your real margin is lower than you think.

What is the difference between margin and markup?

Margin is your profit as a share of the selling price. Markup is your profit as a share of what it cost you. The same profit always gives a smaller margin than markup. If you buy something for 100 and sell it for 150, the profit is 50. That is a 50% markup, but only a 33.3% margin. People mix them up all the time, and it leads to underpricing, so it helps to decide which one you are using. The "Margin ↔ markup" tab converts between them.

How do I work out a selling price from a margin?

Divide your cost by one minus the margin. For a cost of 800 and a 20% margin: 800 ÷ (1 − 0.20) = 800 ÷ 0.8 = 1,000. Don't just add 20% to the cost. That gives 960, which is only a 16.7% margin. If you also pay a percentage fee on each sale, the fee comes off the bottom of the sum too, which this calculator takes care of.

Why is my real margin lower than I expected?

Fees. Payment and marketplace fees are usually charged on the full amount the customer pays, including VAT.
Other costs. Packaging, delivery and anything else you spend per item.
VAT mixed into the price. If your price includes VAT, part of it was never yours.

The "Find my margin" tab shows how much your margin shrinks once these are counted.

Is VAT part of my profit?

No. VAT you charge is collected on behalf of the tax authority, so it is neither your revenue nor your profit. That is why this calculator works out your margin on the price without VAT. VAT rules differ from country to country, so check how it works for your business. If your selling price already includes VAT, tick the box on the "Find my margin" tab.

How are the fees calculated?

The percentage fee is taken from the full amount your customer pays (the price including VAT), which is how most payment services and marketplaces charge. The fixed fee is added on top, once per sale. If your provider charges in a different way, use the fixed fee and "other costs" boxes to match it as closely as you can.

What is a good profit margin?

It depends on your business, so there is no single right number. What matters is that the margin on each item is enough to pay for everything else: rent, wages, repairs and a bit left over for you. This calculator shows the margin on one item. To see whether your whole business is covered, you also need to know your fixed monthly costs.

Is my data private?

Yes. The sums happen in your browser. Nothing you type is sent or stored anywhere.

Tax and costs

Margin questions, answered

Know what your stock is worth