Markup calculator
Enter a cost and a markup to get the selling price, profit and margin — or switch on selling fees to price for the margin you actually keep.
I know my…
Currency
Values are not converted. Change the currency before entering the numbers.
For a digital product this is often zero. If it is, use “From margin”; markup is undefined when there is no cost.
50% markup is a 33.3% margin. The calculator shows both; they are not the same number.
Include selling fees
Platform and payment fees, deducted from the sale price.
Selling price
After fees
£15.00
- Profit before fees
- £5.00
- Selling fees
- £0.00
- Profit after fees
- £5.00
- Margin after fees
- 33.3%
- Markup after fees
- 50.0%
The arithmetic
price = £10.00 × (1 + 50 ÷ 100)
Margin is profit divided by price; markup is profit divided by cost. The same sale has different numbers for each.
Fees are off. For a digital product, turn them on: the platform and payment fee is usually the largest per-sale cost. A 10% fee on a £20 sale is £2 before the payment fee, which is 10 points of margin.
Markup and margin are not the same: a 50% markup is a 33.3% margin, and a 60% margin is a 150.0% markup.
What markup means
Markup is the gap between the cost of a product and its selling price, expressed as a percentage of the cost. If a product costs £10 and you sell it for £15, the profit is £5 and the markup is 50%. The formula is:
price = cost × (1 + markup ÷ 100)
The same sale has a different margin. Margin divides the profit by the price, not the cost: £5 ÷ £15 = 33.3%. That difference is the single most common pricing mistake, and it is why a 50% markup does not produce a 50% margin.
Markup vs margin: the table that ends the confusion
The left column is the number people usually quote; the right columns are what it actually produces. A 100% markup doubles the cost, which is a 50% margin, not 100%.
| Markup | Margin | Price on a £10 cost |
|---|---|---|
| 10% | 9.1% | £11.00 |
| 20% | 16.7% | £12.00 |
| 30% | 23.1% | £13.00 |
| 40% | 28.6% | £14.00 |
| 50% | 33.3% | £15.00 |
| 100% | 50.0% | £20.00 |
Pricing a digital product when the cost is zero
A digital product often has no per-unit cost. The file exists; selling one more copy does not add a manufacturing cost. In that case the markup formula divides by zero and stops being useful. The real per-sale costs are the platform fee, the payment fee, refunds and the cost of acquiring the buyer.
That is why the calculator’s margin mode is the one to use for a digital product. It asks for the margin you want after those costs, and solves for the price. The markup mode is still there for a physical product or a service with a known cost; it is not the right tool for a file with no cost.
The zero-cost case has a strange edge: if the cost is zero and the only cost is a 10% platform fee, the margin is 90% at any price. A target below 90% is already met; a target above 90% is impossible. The calculator says this rather than returning a price of zero. It is the most useful thing a pricing calculator can tell a digital seller.
At a £0 cost and a 10% fee
Any price meets this margin when the cost is zero. The selling fee caps the margin at 90.0%.
Price for the margin you want after fees
Take a product with a £5 cost per sale, a 10% platform fee and a 60% target margin. The formula is:
price = (cost + fixed fee) ÷ (1 − fee% − margin%)
That gives £5 ÷ (1 − 0.10 − 0.60) = £16.67. The 10% fee is £1.67, the profit is £10.00 and the margin is just under 60%. The calculator nudges the price to £16.68 so the rounded fee does not leave the margin a penny short: profit £10.01, margin 60.0%.
At a glance
- Price: £16.68
- Platform fee: £1.67
- Profit: £10.01
- Margin: 60.0%
Turn on “Include selling fees” in the calculator to do this with your own numbers, or use a platform preset. The preset rates are US card examples; check the region and the current rate before you rely on one.
What margin should a digital product have?
There is no universal number, and a calculator that promises one is selling certainty it does not have. The useful ranges depend on the buyer and the alternative they are comparing you with:
- Consumer products compared with free content or a coffee: lower prices, and a smaller absolute margin per sale.
- Creator tools compared with a subscription they already pay for: a higher price is defensible if it replaces months of that subscription.
- Business tools compared with an hour of someone’s time: the price can be several times the consumer price for the same file, because the buyer is buying saved time, not the file.
The full argument is in how to price a digital product. The calculator gives you the arithmetic; the pricing guide gives you the judgement.
Common pricing mistakes
- Treating markup and margin as the same number. A 50% markup is a 33.3% margin. If you need a 50% margin, the markup is 100%.
- Ignoring the fee stack. A 10% platform fee and a 2.9% + 30¢ payment fee are not a rounding error on a £20 sale.
- Pricing by the time it took to make the first one. The buyer is not funding your learning curve.
- Rounding down to a “nice” number. Rounding a £16.68 price to £15 removes more margin than it looks like.
- Discounting without recalculating. A 20% discount on a 60%-margin product leaves 50%, not 60% of the profit; check the number before you launch an offer.
Related calculators and guides
Use the profit margin calculator when you know the margin rather than the markup, the creator fee calculator to see what a platform takes, or the Stripe vs PayPal comparison to check the payment fee. The zero-cost case is explained further in how to price a digital product.
Frequently asked questions
- What is markup?
- Markup is the gap between the cost of a product and its selling price, expressed as a percentage of the cost. If something costs £10 and you sell it for £15, the markup is 50%. The formula is price = cost × (1 + markup ÷ 100).
- What is the difference between markup and margin?
- Markup divides profit by cost. Margin divides profit by price. A 50% markup is a 33.3% margin, and a 50% margin is a 100% markup. The same sale has two different percentages, which is why a 50% markup and a 50% margin are not the same price.
- How do I calculate a selling price from markup?
- Multiply the cost by 1 plus the markup as a decimal. A £10 cost with a 50% markup is £10 × 1.5 = £15. With a 30% markup it is £13. The calculator shows the price, the profit and the margin it produces.
- What is a good markup for a digital product?
- There is no single answer. Digital products often have no per-unit cost, so a markup on cost is not meaningful; the seller is pricing against the buyer’s alternative and the cost of acquiring the sale. Margin is the more useful measure. A template sold to a business can carry a higher price than the same file sold to a hobbyist, because the buyer is comparing it with an hour of someone’s time, not with the cost of making the file.
- Why is markup undefined when the cost is zero?
- Markup is profit divided by cost. If the cost is zero, the division has no finite answer. That is not a bug in the calculator; it is the formula telling you that markup is the wrong measure for a product with no per-sale cost. Switch to the margin mode, where the fee stack and the price are the meaningful inputs.
- How do selling fees change the price?
- A price that leaves a 70% margin before fees does not leave 70% after them. If a platform takes 10% and the payment processor takes 2.9% + 30¢, the seller’s margin is lower by roughly that amount. The calculator’s “Include selling fees” mode solves for the price that leaves the target margin after those fees, not before them.
- Should I use markup or margin to set a price?
- Use margin when you know the percentage of the sale you need to keep after costs and fees. Use markup when you are pricing a physical product with a known unit cost and a supplier’s multiplier. For a digital product with no unit cost, margin is usually the better tool.
- Does the calculator include VAT or sales tax?
- No. Tax depends on the seller’s registration, the buyer’s location and the product, so it is not folded into the price. The calculator is arithmetic, not tax advice. Add tax separately if you are registered.
- Is a 100% markup a 50% margin?
- Yes. If the cost is £10 and the price is £20, the profit is £10. The markup is 100% of cost; the margin is 50% of price. Both are correct descriptions of the same sale.
- Can I use this for a service rather than a product?
- Yes, if you treat the cost as the direct cost of delivering the work, including your time if you want to account for it. The arithmetic is the same. The hard part is deciding what the cost is, not the division.
Sources
This is arithmetic, not tax or accounting advice. Fees change; check the platform’s own pricing page before you rely on a rate.