Work out the margin and markup from a cost and a price, or the price you need for the margin or markup you want. Margin is a share of the price, markup a share of the cost, and mixing them up is how prices end up too low.
Margin = profit ÷ price. Markup = profit ÷ cost. Profit is the same in both; only what it is compared to differs, which is why markup is always the larger number. Here is how they line up:
| Markup on cost | Margin of the price |
|---|---|
| 20% | 16.7% |
| 25% | 20% |
| 33.3% | 25% |
| 50% | 33.3% |
| 75% | 42.9% |
| 100% | 50% |
| 150% | 60% |
| 200% | 66.7% |
| 300% | 75% |
To price for a margin, divide the cost by one minus the margin: a 40% margin on a $12 cost is $12 ÷ 0.6 = $20. To price for a markup, multiply: a 50% markup on $12 is $12 × 1.5 = $18. On a marketplace, fees come out of the price, so a margin worked out on the cost alone overstates what you keep — the Etsy and eBay calculators include them.
Intakes knows what every item cost you, fees and shipping included, so every sale shows its real margin — and reports show which items, categories and sources earn their keep.
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