Margin and markup calculator
Margin is the share of the selling price that stays with you after the product cost. Markup is how much you add on top of the purchase price. They are often confused, and the difference matters for ads.
EUR
EUR
Result
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How it's calculated
- Margin = (selling price - purchase price) / selling price.
- Markup = (selling price - purchase price) / purchase price.
- With VAT, the selling price is first divided by 1 + VAT rate.
You buy for 30 EUR and sell for 61.50 EUR with 23 % VAT. Without VAT the price is 50 EUR. Margin is 40 % and markup is 67 %.
What is a good value?
- For e-shops that want to advertise, margins under 25 % make paid ads difficult.
- 40 % and more gives ads real room to work.
- Always calculate from prices without VAT, VAT is not your money.
Frequently asked questions
What is the difference between margin and markup?
Margin is profit divided by selling price, markup is profit divided by purchase price. A 50 % markup is only a 33 % margin.
Why calculate without VAT?
VAT goes to the state. Using prices with VAT makes margin look higher than it is.
Which margin should I use in the ad calculator?
Gross margin per order after product cost, shipping and fees you pay, but before ad spend.
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