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Count.ie

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 calculator

What 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  • Do not quote a markup percentage as if it were a margin.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.

Related business guides

Try your own scenario in the calculator

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