💷 Pricing and profit tool

Markup Calculator (UK)

Work out markup, gross margin, VAT impact, fees, profit per unit and the selling price needed to hit a target markup. Useful for ecommerce sellers, retailers, freelancers selling productised services, market traders and small businesses trying to price properly instead of guessing.

Enter your cost, price and fees

Markup is profit divided by cost. Margin is profit divided by selling price. They are not the same. This page also lets you account for VAT and selling fees so your pricing reflects reality, not just wishful spreadsheet maths.

Markup vs margin: the difference that catches people out

Markup and margin sound similar, but they answer different questions. Markup tells you how much profit you make compared with what the item cost you. Margin tells you how much of the selling price is left as profit after direct costs and fees. If you confuse the two, you can underprice badly.

For example, if something costs £20 and you sell it for £30, the gross profit is £10. That means the markup is 50% because ten pounds of profit on twenty pounds of cost is fifty percent. But the margin is only 33.3% because ten pounds of profit is one third of the thirty-pound selling price. That gap matters when you are setting targets or comparing offers.

Businesses often talk about margin because it helps with overall profitability. Sellers often talk about markup because it helps with pricing decisions. Both are useful, but they are not interchangeable.

Why VAT and selling fees matter

One of the easiest pricing mistakes in the UK is treating a VAT-inclusive customer price as if the full amount belongs to you. If you are VAT registered, part of that money is tax collected on behalf of HMRC. This calculator lets you strip that out so the markup maths uses a cleaner net selling price.

Fees matter just as much. Card processors, online marketplaces and booking platforms all nibble at revenue. A small percentage fee plus a fixed fee can turn a healthy-looking product into a mediocre one surprisingly fast. That is why this page shows profit after direct selling fees, not just sale price minus cost price.

  • Use VAT inclusive mode if your customer-facing price already includes VAT.
  • Use VAT exclusive mode if you are planning net trade pricing first.
  • Add percentage and fixed fees to model the real selling channel.
  • Check target price before running discounts or free-shipping offers.

Good uses for a markup calculator

  • Checking whether a new wholesale product line leaves enough room after marketplace fees.
  • Comparing two suppliers with different landed costs.
  • Setting a sensible retail price before launching on Shopify, eBay, Etsy or Amazon.
  • Testing whether bundle pricing still leaves enough profit after VAT and payment fees.
  • Working backwards from a target markup when you know the minimum margin you want.

If your profit per unit comes out thin, be honest about the risk. A few returns, damaged units, discount codes or extra postage can wipe out the month. Thin margin businesses can still work, but only if volume and operations are strong enough to support them.

Quick example

Suppose your item costs £18.50, you sell it for £34.99, the sale price includes VAT at 20%, the marketplace charges 12.8%, and there is a fixed fee of 30p. The net selling price is lower than the headline customer price once VAT is removed, and the selling fee takes another slice. Your real profit per unit can be very different from what you first expected.

That is why pricing by instinct is risky. A proper markup check helps you decide whether to raise price, lower cost, change channel, or accept a smaller markup because the product converts so well. In other words, this is not just a maths toy. It is a quick pricing sanity check.

For a fuller view of total sales needed to cover overhead, pair this with Calcify's break-even calculator. Markup tells you whether each sale is worthwhile. Break-even tells you whether the whole model stands up once fixed costs enter the picture.