PRICING

Margin and markup are different numbers

Why adding 30% to your costs does not give you a 30% profit margin.

Updated 5 November 2026 · All numeric examples are illustrative.

Markup starts from cost

If a job costs 20 and you add a 25% markup, the price is 25. Profit is 5. That profit is 20% of the selling price, not 25%. A markup is a percentage of cost; a margin is a percentage of revenue.

Margin starts from the selling price

With no selling fees, a 25% margin on a job costing 20 requires 20 ÷ 0.75 = 26.666… before rounding. The difference pays the target profit. The calculator rounds the unit price up to cents so the batch total equals unit price times quantity.

Fees change the denominator

For a production cost of 20, a fixed order fee of 0.30, percentage fees of 3% and a target margin of 30%, the unrounded order price is 20.30 ÷ 0.67, or about 30.2985. The fee percentage and target margin together must stay below 100%.

A calculated price is not a promise of demand

The result is a cost-based target, not a market appraisal. Use the custom unit price to see what a different offer does to estimated profit. Decide whether the scope, cost structure or selling price needs to change.

Put your own time, material and business costs into the estimate.

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