How the seller margin calculator works
Updated November 2026
What margin and markup mean
Profit is what a sale leaves after every cost of that sale is paid. Margin and markup are two ways of reading the same profit. Margin divides profit by revenue, so it says what share of the buyer's money you keep. Markup divides profit by your own costs, so it says how much you added on top of what the sale cost you. A seller who thinks in markup but reads it as margin prices too low, because markup is always the bigger number on a profitable sale.
The formula, in plain words and symbols
Four steps, and the calculator above runs exactly these:
Step 1: revenue and the fee. revenue = selling price + shipping charged to the buyer. platform fee = fee percent x revenue. The fee rides on the whole amount the buyer pays, which is how most marketplaces count it.
Step 2: profit. profit = revenue - (product cost + shipping cost you pay + packaging and other per-sale costs + platform fee).
Step 3: margin and markup. margin = profit / revenue x 100. markup = profit / (product cost + shipping cost + packaging) x 100. The markup base leaves the platform fee out, because the fee is the platform's cut of revenue, not a cost you chose.
Step 4: the two prices. break-even revenue = your costs before the fee / (1 - fee percent), and the break-even price is that revenue minus the shipping charged. The target price does the same with your target in the formula: target revenue = your costs before the fee / (1 - fee percent - target percent). If the fee and the target add up to 100 percent or more, that division has nothing left to work with, and no price reaches the target.
A worked example
Take the numbers this calculator opens with. A selling price of $50, shipping charged of $5, a product cost of $18, a shipping cost of $7, packaging of $1.50, a platform fee of 10 percent, and a target margin of 30 percent.
Step 1: revenue is $50 + $5, which is $55.00, and the fee is 10 percent of that, $5.50. Step 2: your own costs are $18 + $7 + $1.50, which is $26.50, so total cost is $26.50 + $5.50, which is $32.00, and profit is $55.00 - $32.00, which is $23.00. Step 3: margin is $23.00 / $55.00, which is 41.82 percent, and markup is $23.00 / $26.50, which is 86.79 percent. Step 4: break-even revenue is $26.50 / 0.90, which is $29.44, so the break-even price is $29.44 - $5, which is $24.44. Target revenue is $26.50 / 0.60, which is $44.17, so the price that hits the 30 percent target is $44.17 - $5, which is $39.17. The $50 price clears the target, which is why the example reads as a good sale. Change any one input and every one of those numbers moves; that is what the fields above are for.
How to read your result
Margin at or past your target: the sale clears the bar you set. Margin above zero but below your target: the sale pays, but thin; the target price shows the smallest raise that fixes it, and your costs show where a saving would do the same work. Margin at or below zero: the sale loses money at this price, and the break-even price is the floor below which no discount should ever take it. Check the fee percent first if a number surprises you: a fee typed for the wrong platform moves every result on the page.
What the math takes as given, and what it leaves out
The math counts one sale, with the fee as a single percent of revenue. Real platforms can add flat per-order fees, listing fees, and ad charges on top; if yours does, add the flat parts into packaging and other per-sale costs so the profit stays honest. It leaves out taxes, returns and refunds, discounts, and your own time. It prices a sale; it does not add up a month of them, and it cannot tell you which product in a full shop carries the rest.
The tracking side of the same selling
One honest price check helps once. A shop stays honest when stock, costs, and sales live in one place and every product keeps its own profit line. The Kollaz Money guide Inventory and Bookkeeping Spreadsheet in One walks through that system, one workbook for inventory and bookkeeping together.
The platform-specific side of the same sale
This page stays generic because sellers sell in many places. On Etsy, the fees come in named lines with their own rules, and the free Etsy Fee Calculator runs those lines exactly, so an Etsy seller can check the generic answer against the platform's own count.
Sources
- The definitions are the standard ones used in bookkeeping: margin is profit divided by revenue, and markup is profit divided by cost. The markup base here is the seller's own per-sale costs before the platform fee, as stated openly in Step 3 above and in the calculator's spec.
- The platform fee is a single visitor-typed percent of revenue (price plus shipping charged). No platform's fee schedule is built into this page, by design; the Etsy-specific schedule lives in the sibling Etsy Fee Calculator.
- The paid product named on this page is the Inventory Tracker & Bookkeeping Spreadsheet (Kollaz, KM-041): inventory and bookkeeping in one workbook, with a filled sample workbook and a read-first guide, per the Kollaz catalog (catalog.json, checked 2026-11-10).
Educational information only, not business or financial advice. Consider a qualified professional for decisions about your specific situation.