What markup do I need to hit my margin?
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The goods, inbound freight, duties and packaging — everything paid per unit before it can be sold.
Display only. Your figures are read in the currency you pick — nothing is converted and no exchange rate is applied.
Enter what one unit costs you. Markup and margin are both read against it, so there is nothing to show until it is here.
- Unit costNeeded
- Selling price, or the gross margin you want to keepNeeded
- Currency, for the labels onlyOptional
- 10% margin
- 11.1% markup
- 15% margin
- 17.6% markup
- 20% margin
- 25% markup
- 25% margin
- 33.3% markup
- 30% margin
- 42.9% markup
- 35% margin
- 53.8% markup
- 40% margin
- 66.7% markup
- 45% margin
- 81.8% markup
- 50% margin
- 100% markup
- 55% margin
- 122.2% markup
- 60% margin
- 150% markup
- 65% margin
- 185.7% markup
- 70% margin
- 233.3% markup
- 75% margin
- 300% markup
- 80% margin
- 400% markup
Gross margin is before payment processing and shipping. See what an order keeps after Shopify fees, or check how much of this margin a discount takes.
The currency is a label: your figures are read in the currency you choose and nothing is converted. The worked examples further down stay in US dollars. Nothing you type is sent anywhere — there is no account, no install and no store connection.
Markup, margin and the gap between them
Markup is how much you add on top of what a product costs you, while gross margin is how much of the selling price you keep, so a unit that costs 20 dollars and sells for 40 carries a 100 percent markup and a 50 percent gross margin.
No benchmark is used — markup and gross margin come entirely from the cost and price you enter. Gross margin stops at the unit cost, so for what an order keeps after payment processing, use the Shopify fees calculator.
Two percentages, one amount of money. Most pricing mistakes come from reading one of them as if it were the other.
- Unit cost
- What one sellable unit costs you: the goods, inbound freight, duties and packaging. Leave out costs that are paid per order rather than per unit, such as payment processing, or they get counted twice.
- Markup
- The gross profit on a unit, stated as a share of what the unit cost you. A 12 dollar tee sold for 30 carries a 150 percent markup. Wholesale price lists and supplier conversations usually speak in markup.
- Gross margin
- The same gross profit, stated as a share of the selling price. The 30 dollar tee keeps 60 percent. Accounts, break-even ROAS and discount maths all run on margin, so it is the figure to carry into the rest of your planning.
- Gross profit per unit
- The money itself: price less unit cost, before fees, shipping you absorb and advertising. Both percentages are just two ways of describing this one amount.
- Keystone
- Retail shorthand for a 100 percent markup, which is a 50 percent gross margin. A useful reference point, not a rule: categories with high returns or heavy shipping usually need more.
Nudgesmart is available on the Shopify App Store. Browse the template library or see what it costs.
Eight prices, read as markup and as margin
Illustrative arithmetic, not customer data. The first five rows start from a price; the last three start from the margin a merchant wants and solve for the price.
| Scenario | Unit cost | Price | Markup | Gross margin | Profit per unit |
|---|---|---|---|---|---|
| Hand-poured candle, priced at three times cost | $8.00 | $24.00 | 200% | 66.7% | $16.00 |
| Printed tee on a standard wholesale markup | $12.00 | $30.00 | 150% | 60% | $18.00 |
| Keystone pricing: double the cost | $20.00 | $40.00 | 100% | 50% | $20.00 |
| Phone accessory with a thin markup | $45.00 | $60.00 | 33.3% | 25% | $15.00 |
| Clearance line sold under cost | $18.00 | $15.00 | -16.7% | -20% | -$3.00 |
| Skincare, solving for a 60% margin | $15.00 | $37.50 | 150% | 60% | $22.50 |
| Homeware, solving for a 35% margin | $40.00 | $61.54 | 53.9% | 35% | $21.54 |
| Digital-print poster, solving for an 80% margin | $5.00 | $25.00 | 400% | 80% | $20.00 |
Where a markup figure flatters you
Gross margin is not what the order leaves you
This margin is before payment processing, shipping you absorb, returns and advertising. A 50 percent gross margin can be a 30 percent contribution once those are out, and it is the second figure that decides whether a campaign pays.
One markup across a catalogue hides the thin lines
Applying the same markup to every product gives every product the same margin only on paper. Items with heavier shipping, higher return rates or frequent discounting keep far less, so it is worth running the numbers per product line.
A discount comes off the price, not the markup
A 20 percent code on a 100 dollar item with a 50 percent gross margin takes the gross profit from 50 dollars to 30, so a fifth off the price removes two fifths of the profit. The discount impact calculator shows how many extra sales that has to be made back with.
The price the maths wants is not always the price the market takes
A solved price tells you what you need to charge to keep a margin, not whether shoppers will pay it. If the answer is well above what comparable products sell for, the lever is the unit cost, not the price.
Markup and margin questions
What is the difference between markup and margin?
Both describe the same gross profit per unit, measured against different things. Markup compares it with what the product cost you; gross margin compares it with what the shopper paid. A product that costs 20 and sells for 40 has a 100 percent markup and a 50 percent margin, and neither number is wrong.
What markup do I need for a 50 percent margin?
A 100 percent markup, which is the keystone pricing many retailers start from. A 40 percent margin needs roughly a 67 percent markup, a 60 percent margin needs 150 percent and an 80 percent margin needs 400 percent. The table beside the calculator lists the common rungs.
Why is the markup always higher than the margin?
Because the cost is always smaller than the price when you sell above cost, so the same profit looks bigger next to it. The gap widens fast as prices climb: at a 25 percent margin the markup is 33 percent, and at a 75 percent margin it is 300 percent.
How do I work out a price from the margin I want?
Switch the calculator to the target-margin direction, enter your unit cost and the gross margin you want to keep, and it returns the price to charge and the markup that price implies. The price is rounded up to the cent so it never lands just under your target.
Should the unit cost include shipping and fees?
Include everything you pay to get one unit sellable: the goods, inbound freight and duties, and packaging. Payment processing and outbound shipping are usually counted per order rather than per unit, and the Shopify fees calculator handles those.
Does this tool need my store, an account or an install?
No. It runs in the page, takes two numbers you already have, and sends nothing about your store anywhere.
The price sets the margin. Every code spends it.
Nudgesmart issues the discount code inside the popup that earns it and reports each code as displayed, copied and redeemed, so the margin you priced for is not given away by default.
