The two formulas
- Markup = profit ÷ cost × 100
- Margin = profit ÷ price × 100
A product that costs $50 and sells for $100 has a 100% markup but a 50% margin — the same $50 profit.
Markup to margin conversion
| Markup | Margin |
|---|---|
| 25% | 20% |
| 50% | 33.3% |
| 75% | 42.9% |
| 100% | 50% |
| 150% | 60% |
| 200% | 66.7% |
Why it matters
If you think “I add 50%, so I keep 50%”, you actually keep only 33.3% of each sale — before fees, shipping and ads. On marketplaces, 15% referral fees and shipping can wipe that out entirely.
How to price for the margin you need
- Work out your full cost per unit — product (landed), fees, shipping, packaging.
- Decide the margin you need after those costs (many sellers aim for 20–40%).
- Price = cost ÷ (1 − target margin). A $12 cost at a 40% margin needs a $20 price.
Use the Profit Margin Calculator to find the price for any target margin, and the Markup Calculator to convert between the two.