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Product pricing and markup are related, but they do not use the same denominator.
Target margin calculates profit as a percentage of selling price. Markup calculates profit as a percentage of cost.
A 40% margin is not the same as a 40% markup. If cost is $25, a 40% margin price is $41.67, while a 40% markup price is $35.00.
Use the Product Pricing Calculator at /tools/product-pricing-calculator for margin-based pricing, and the Markup Calculator at /tools/markup-calculator for markup-based pricing.
Product pricing vs markup: what should you use
Product pricing and markup are related, but target margin is often clearer for ecommerce decisions.
Target margin calculates profit as a percentage of selling price. Markup calculates profit as a percentage of cost.
A 40% margin is not the same as a 40% markup. If cost is $25, a 40% margin price is $41.67, while a 40% markup price is $35.00.
Use the Product Pricing Calculator at /tools/product-pricing-calculator for margin-based pricing, and the Markup Calculator at /tools/markup-calculator for markup-based pricing.
Product Pricing
markup
Profit Margin
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Useful tools
Profit Margin Calculator
Calculate profit, cost, and margin for ecommerce, Shopify, Amazon, Etsy, or independent store products.
Markup Calculator
Use this free markup calculator to compare cost, selling price, markup, profit, and margin before publishing a product price.
Discount Calculator
Use this free discount calculator to find discount amount, final price, and savings before running a sale or promotion.
Break Even Calculator
Use this free break-even calculator to estimate break-even units, contribution margin, and revenue before launching or pricing a product.
Shipping Cost Calculator
Use this free shipping cost calculator to estimate carrier cost, packaging cost, and total shipping cost before setting product prices.
Ecommerce Profit Calculator
Calculate profit per order after product cost, shipping, fees, and ad cost.