Markup is your profit divided by what the item cost you, while margin is the same profit divided by the price the buyer paid. A shirt that costs $10 and sells for $25 has a 150% markup but a 60% margin, and mixing the two up leads to prices that look healthy on paper and are not.
This glossary entry is for Etsy sellers setting or checking prices, especially in print on demand, where product cost, shipping and Etsy's fees all come out of each sale. Once you see both numbers side by side, you will know which one belongs to which decision.
Markup: profit compared with cost
Markup measures how much you added on top of your cost. The formula is markup = (price minus cost) divided by cost. With a $10 cost and a $25 price, the profit is $15, and $15 divided by $10 is a 150% markup.
Markup is handy when you build a price up from a cost. A 100% markup doubles the cost, and a 150% markup multiplies it by 2.5. That is why so many pricing rules of thumb are written as markups: they are quick to apply to a supplier price.
Margin: profit compared with price
Margin measures how much of each dollar the buyer pays you keep. The formula is margin = (price minus cost) divided by price. For the same shirt, $15 divided by $25 is a 60% margin.
Margin can never reach 100%, because profit can never be larger than the price. Markup has no ceiling. That gives you a quick way to tell which number someone is quoting: any figure above 100% must be a markup.
One worked example, with Etsy fees
The 60% margin above ignores fees, so it overstates what you keep. Here is the same $25 shirt for a seller with a US bank account, with free shipping for the buyer and no sales tax. The $10 cost and $25 price are round numbers for the arithmetic, not real quotes, so swap in your own.
Transaction fee: 6.5% of the order total (Etsy fees), which is $1.63.
Payment processing for a US bank account: 3% + $0.25 (Etsy payment processing fees), which is $1.00.
Listing fee: $0.20 per listing (Etsy fees page).
Product and shipping from your production partner: $10.00.
Total costs come to $12.83, so the profit is $12.17. The margin after fees is $12.17 divided by $25, about 48.7%, while the markup on product cost still reads 150%. The markup did not move, but nearly a fifth of the apparent profit went to fees.
Two more cases show why margin is the number to watch:
Offsite Ads: if the sale came through an Offsite Ad and your shop made less than $10,000 on Etsy in the past 365 days, Etsy charges "a 15% fee on the order total" (Etsy fees page), which is $3.75 here. Profit drops to $8.42, a margin of about 33.7%.
A 20% off sale: Etsy lets you offer between 5% and 75% off (Etsy sales and coupons). At 20% off, the price becomes $20 and the percentage fees shrink with it: $1.30 transaction, $0.85 processing and $0.20 listing. Profit is $7.65, a margin of about 38%. A 20% discount cut profit by about 37%.
Rates depend on where you sell from. For a seller with a bank account in Türkiye, payment processing is 6.5% + 14 TRY on the same Etsy page, and a regulatory operating fee of 1.67% applies (Etsy regulatory operating fee). On the same $25 sale that brings the margin down to about 44.5%, before the fixed 14 TRY. If your listing currency differs from your bank account's currency, Etsy also charges a 2.5% currency conversion fee (Etsy fees page). Plug in your own country's rows.
Converting between margin and markup
You can turn one into the other without knowing the price:
Margin = markup divided by (1 + markup).
Markup = margin divided by (1 minus margin).
The table shows common pairs for a $10 cost, before fees.
| Markup | Margin | Price for a $10 cost |
|---|---|---|
| 25% | 20% | $12.50 |
| 50% | 33.3% | $15.00 |
| 100% | 50% | $20.00 |
| 150% | 60% | $25.00 |
| 200% | 66.7% | $30.00 |
| 300% | 75% | $40.00 |
Treat the margin column as the most you could keep, then subtract fees as in the example above. A product priced at a 100% markup looks generous until you remember that a 6.5% transaction fee and processing come out of the price, not the cost.
Which one to use when pricing
Use markup when you start from a cost and want a quick first price: cost times (1 + markup). Use margin for everything that happens after the price is set, because Etsy's percentage fees, Offsite Ads, sales and coupons are all percentages of the price, not of your cost. A target margin also lets you compare products with very different costs, such as a tee and a hoodie, on the same scale.
A simple routine: decide the margin you want to keep after fees, work out the price that delivers it, then sanity-check that price in Etsy search. Etsy's Marketplace Insights tool shows price ranges of recently bought listings for search terms (Etsy updates). Our guide to pricing print on demand products on Etsy walks through that routine, what you keep from a $25 sale breaks the fees down further, and running sales without losing money applies the same math to discounts.
Seeing your real margin in Alomations
A margin is only as good as the numbers behind it. In Alomations, the orders screen shows each order's item cost and shipping separately before you pay a production partner, so the cost side of the formula is never a guess. Product prices are listed on the catalog as "from" prices, for example Gildan 5000 from $6.89 (read October 17, 2026), and shipping is quoted separately.
On paid plans, the profit view shows the profit you kept after Etsy fees and product cost on fulfilled orders, which is margin in money terms, order by order. The finance area also itemises every credit, with top-ups and plan credits counted separately, so you can add your tool costs to the picture as well. For the habit of checking it, see how to track profit per order on Etsy.
Frequently asked questions
Is a 50% markup the same as a 50% margin?
No. A 50% markup on a $10 cost gives a $15 price and a 33.3% margin. A 50% margin needs a 100% markup, which is a $20 price.
Can margin be more than 100%?
No. Margin is profit divided by price, and profit cannot exceed the price. Markup can be any size.
Should I include Etsy fees when I calculate margin?
Yes, for pricing decisions. A margin before fees describes the product, while a margin after fees describes what your shop keeps. Etsy's transaction fee alone is 6.5% of the order total, so the gap is never zero.
What margin should a print on demand product have?
There is no single right number, because it depends on your costs, your niche and how you sell. Decide the profit per order you need, include every fee, and test the price against what buyers in your niche pay.
You can see item cost and shipping on every order from the Alomations free plan.