Free calculator
Margin and markup from one price and one cost, with VAT stripped first the way a European statement does it, and the per-order costs that decide whether the unit actually pays.
Profit margin, on the net price
55,1%
19Profit per unit
€22,68
net price minus goods
Markup on cost
122,6%
the other way round
16Net price
€41,18
after €7,82 VAT
The shelf price. VAT is stripped before any margin is computed, because it was never your money.
What one order adds
Optional, and the difference between a margin on paper and a unit that pays: the parcel and the payment fee exist because the sale happened.
↑ ↓ to nudge, Shift for ten. Commas or dots both work.
Advertising, rent and salaries still have to come out of the €15,35 each unit contributes. The monthly version of this ladder, with marketing and overhead in it, is the contribution margin calculator below.
€22,68 of profit per unit after the goods. The same euro reads as a 122,6% markup on cost, which is why the two numbers must never be swapped.
An estimate from flat rates. In nouz every order is priced from the costs of its own day.
A profit margin calculator takes a product's selling price and unit cost and returns the margin (profit as a share of the net price) and the markup (profit as a share of the cost). This one also strips VAT from a gross price first and shows what the unit contributes once fulfilment and payment fees are out.
The formula
Margin and markup describe the same euro from opposite ends. Margin is profit measured against the selling price; markup is the same profit measured against the cost. For any profitable product the markup is the bigger number, and quoting it where a margin belongs makes every price look healthier than it is.
The second trap is quieter and more European: the price on the shelf still contains VAT, and VAT was never your money. At German rates, computing margin on the gross price flatters every product by roughly a sixth, which is enough to make a losing unit read as a thin one. The margin only means something once it is measured against the net price.
And a margin after the goods is still not a unit that pays. The parcel and the payment fee exist because the sale happened, so the number a pricing decision should rest on is what one unit contributes after them, which is the per-unit version of CM2.
Where it goes wrong
A margin is arithmetic, so a flattering answer is always a flattering input. These are the four we see most, in order of the damage they do.
A €49,00 shelf price at 19% VAT is €41,18 of revenue; the €7,82 belongs to the tax authority on the day of the sale. Compute the margin on €49,00 and every product in the catalogue looks roughly a sixth better than it is, and the error compounds into every decision priced on it.
The rule is mechanical: gross price in, VAT out, margin on what is left.
A unit bought for €18,50 and sold for €41,18 net is a 122,6% markup and a 55,1% margin, and both sentences are true. The damage happens when the first number is used in a sentence that needs the second: a target like “we need 60% margin” is missed by a mile by a product whose 60% was actually markup.
Margin can never exceed 100%. Markup can. That is the quickest way to spot which one a number actually is.
Margins computed on the recommended price ignore what the catalogue actually did: discounts, codes and sale events all sell units below list. The honest input is the price the unit really sells at on an average day, and if that number is unknown, that is the finding.
A catalogue-wide average hides exactly the products this calculator exists to expose: the heavy item whose parcel eats its healthy goods margin, and the discounted line running at a loss inside a profitable category.
Run the arithmetic per product, starting with your five biggest sellers; they carry most of the month.
Worked example
The calculator’s own defaults, so you can retrace every step above: a product on the shelf at €49,00 including 19% VAT, bought in for €18,50, shipped for €6,40 all-in, paid for through a gateway taking 1,9% of the gross.
VAT comes out first: €41,18 of the price is actually revenue. The goods take €18,50, leaving €22,68 of profit per unit, a 55,1% margin, which the same euro would flatter into a 122,6% markup if measured against the cost instead.
The number that started as “55% margin” is €15,35 once the unit has been shipped and paid for: a 37,3% contribution. That is the figure advertising has to be bought out of, and the gap between the two percentages is exactly what a price-only margin calculator never shows.
From here the question changes shape: how many of these contributions cover the month’s fixed costs is the break-even question, and it has its own calculator below.
In the app
A calculator works from flat rates you type once. nouz prices every single order from the cost rules that were in force on that order's own date, and rebuilds the same statement every night from your own orders and your own ad spend.
More calculators
Each one is a different question about the same statement. All 32 are free, and none of them asks you to sign up.
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The long version
Want the long version rather than the arithmetic?
CM1 · CM2 · CM360,8% · 48,9% · 23,5%the same revenue, three margins10 min readCM1, CM2 and CM3 explained: the three margins ecommerce operators steer onCM1, CM2 and CM3 are contribution margins after product, fulfilment and marketing costs. What each level includes, the formulas, and a worked example.CM1, CM2 and CM3 explainednouz computes margin and contribution for every product you sell from the orders themselves, at the costs that were true on each order's own date, every night.