For shops, sellers and freelancers: find your profit, margin and markup from cost and price, or work out the selling price you need to reach a target margin or markup.
Example: a candle costs 6 to make (wax, jar, label, packaging) and sells for 15.
Profit 9. Margin 9 ÷ 15 = 60%. Markup 9 ÷ 6 = 150%. Sell 200 candles and the profit is 1,800.
Many new sellers add their target percentage to the cost and think that is their margin. It is not: a 30% markup gives only a 23% margin. If you need 30% of every sale to cover your costs and profit, divide the cost by 0.70 instead of multiplying it by 1.30.
Keep a daily record of sales and costs so you see your real margin, not just the planned one. A cashbook like TallyKnot Local makes that simple.
Both compare profit with a price, but with a different one. Margin is profit as a share of the selling price; markup is profit as a share of the cost. Something that costs 60 and sells for 100 has a profit of 40: a 40% margin and a 66.7% markup.
Divide the cost by (1 − 0.30). A product that costs 70 needs a price of 70 ÷ 0.70 = 100 for a 30% margin. Adding 30% to the cost (91) only gives a 23% margin.
Everything it takes to sell one unit: the product or materials, packaging, shipping, payment fees, and a share of costs such as rent or software if you want to see the real profit.
It depends on the trade. Supermarkets work with a few percent, many shops with 20–50%, and services or digital products often more. Compare with businesses like yours, and make sure the profit covers your fixed costs and your own time.
A calculator gives you one answer. A cashbook shows you the whole picture: write down cash in and cash out, see where the money goes in charts and on a calendar, and share a ledger with your family, team or friends.
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