Stop confusing margin with markup. Factor in transaction fees, packaging, and overhead to protect your bottom line.
| Gross Retail Selling Price | $55.00 |
| Less Cost of Goods Sold (COGS) | -$18.00 |
| Less Shipping, Packaging & Box Allowance | -$4.50 |
| Less Platform Transaction & Gateway Processing Fee | -$1.90 |
| Net Contribution Margin per Unit | +$30.60 / unit |
| Effective Unit Profit Margin Ratio | 55.6% |
| Applied Unit Markup Factor | 205.6% |
| Monthly Breakeven Sales Volume | 82 Units / month |
Many new e-commerce sellers mistakenly treat markup and margin as the same thing, leading to unexpected business losses. Markup is the percentage added to your cost of goods to determine retail price. Margin is the percentage of the retail price that remains as profit after deducting all costs. A 50% markup only yields a 33.3% gross margin!