Pricing · Any platform
Profit margin vs markup: price from the right base
Use a $100 cost example to compare margin and markup, understand their different bases and calculate a whole-cent price for a 30% target.
Margin and markup use different denominators
Both percentages start with the same dollar profit. Their difference is the base used to express it. Margin tells you how much of the selling price remains after entered costs. Markup tells you how much you added above those costs.
Profit = selling price − entered cost total
Margin = profit ÷ selling price × 100
Markup = profit ÷ cost total × 100
A supplier saying “add 30%” is usually describing a markup. A pricing goal saying “keep 30% of the sale” describes a margin. Applying the wrong formula produces a different selling price and a different amount left to cover the business.
A $100 cost, two different 30% goals
Start with $100 product cost and $0 other entered costs. At a $130 selling price, profit is $30.00. The markup is 30%, because $30 is 30% of $100. The margin is 23.08%, because $30 is divided by $130.
| Task | Selling price | Profit | Margin | Markup |
|---|---|---|---|---|
| Current $130 price | $130.00 | $30.00 | 23.08% | 30.00% |
| Target 30% markup | $130.00 | $30.00 | 23.08% | 30.00% |
| Target 30% margin | $142.86 | $42.86 | 30.00% | 42.86% |
30% markup price: $100 × (1 + 0.30) = $130.00
30% margin price: $100 ÷ (1 − 0.30) = $142.857… → $142.86
The target margin price rounds upward to the lowest whole cent that reaches the target. $142.85 is slightly below a true 30% margin, even if a display rounded to two percentage decimals appears close. The calculator uses the unrounded target comparison before choosing the cent price.
The result depends on what you put in cost
With only product cost, the result is gross product profit. It may still need to pay shipping, marketplace fees, labor, returns and ads. Adding those dollar allocations into other costs changes the result to profit after those entered costs.
Suppose the $100 product also needs $5 shipping and $3 packaging. A 30% margin on all $108 of entered costs needs $108 ÷ 0.70, rounded up to $154.29. Pricing only from the $100 product cost leaves the other $8 to come out of the original profit.
This general tool assumes costs entered as fixed dollar amounts. A marketplace fee expressed as a percentage of selling price changes when the price changes. For eBay target pricing, use the eBay break-even calculator, which recalculates fees at each price. For other platforms, check the candidate price in its fee calculator instead of treating an old fee allocation as permanently fixed.
Handle zero and extreme targets explicitly
At a zero selling price, margin has no defined denominator. At zero cost, markup has no defined denominator. The calculator still shows dollar profit and labels the undefined percentage rather than presenting an infinite return.
A 100% margin with positive costs cannot be reached at a finite price. The supported margin target is below 100%; target prices are limited to $1,000,000. A high calculated target is an arithmetic result, not evidence buyers will pay it.
Check the price against demand and compare the result after a discount. Margin and markup help you describe a price accurately; neither predicts sales volume or income.
Sources and scope
Sources and formulas checked 2026-10-04. These are hypothetical examples and estimates using the entered costs, not invoices, typical margins or forecasts of sales or income. The site is independent of Amazon, Shopify, eBay and Etsy. Review your account terms for adjustments that apply to you.
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