Business · Calculator companion · By K Imports
Margin & markup pricing: practical guide
This guide explains how to use the Count.ie margin & markup pricing. Find a target price, or analyse an existing selling price. Follow the inputs, method and worked example below, then compare your own scenario.
Guide written .
Open the Margin & markup pricing calculatorWhat to prepare
- Record cost and selling price excluding VAT so tax does not distort the percentages.
- Decide whether you need margin (share of selling price) or markup (share of cost).
- Include every direct cost in the cost figure.
Understand the inputs
- Existing selling price (€)
Shown when Analyse an existing selling price is true.
The calculation method
Target price = cost ÷ (1 − margin). Gross margin divides profit by revenue; markup divides profit by cost.
Worked example
Illustrative inputs and their result.
Example inputs
- Unit cost excluding VAT (€)
- 100
- Target gross margin (%)
- 30
- Analyse an existing selling price
- No
Calculated example result
- Selling price
- €142.86
- Profit per unit
- €42.86
- Gross margin
- 30%
- Markup on cost
- 42.86%
How to interpret the result
Margin and markup describe the same profit against different bases, so a 25% markup is a 20% margin. Gross margin ignores overheads, so it is not net profit.
Change only the selling price, then only the cost, and note the margin each time. Check the price needed for a target margin as cost divided by one minus the margin.
Common mistakes to avoid
- Do not quote a markup percentage as if it were a margin.
- Do not include VAT in either price.
- Discounts reduce margin faster than they appear to; recalculate from the discounted price.
Assumptions and sources
Use consistent VAT-exclusive amounts. Gross profit does not deduct overheads. A loss remains a negative profit and margin.
If your case falls outside this scope, use a more suitable calculator or contact us about an unclear method.