Margin and markup are not the same number.
Work out what you are actually making, or the price you need to charge to hit the margin you want.
- Profit per unit
- NGN 0.00
- Markup on cost
- 0.0%
- Profit margin
- 0.0%
Margin, markup, and the difference that costs money
- What is the difference between margin and markup?
- Markup is your profit measured against what the item cost you. Margin is the same profit measured against what you sold it for. Buy at ₦22,000 and sell at ₦32,000 and your profit is ₦10,000 — that is a 45.5% markup but only a 31.3% margin.
- Why does the difference matter?
- Because pricing by markup and reporting by margin is how a business quietly runs thinner than it thinks. If you need a 30% margin and add 30% to your cost, you land at about 23% — and the gap only widens as your costs rise.
- How do I price for a margin I want?
- Divide your cost by (1 minus the margin as a decimal). For a 30% margin on a ₦22,000 item: 22,000 ÷ 0.7 = ₦31,429. Switch this calculator to 'My selling price' and it does that for you.
- Should I include VAT in these figures?
- No. Work in amounts before VAT. VAT is money you collect on behalf of FIRS and pass on, so counting it as revenue overstates both your price and your margin.
- What is a good profit margin for a small business?
- It depends entirely on what you sell. Retail and trading often run at 20–40%, services higher because there is less cost of goods behind them. The number that matters more than any benchmark is whether yours is going up or down over time.
- What costs should I count?
- For margin per item, count what the item itself cost — the purchase price, plus transport and any handling to get it on your shelf. Rent, staff and data are overheads: real costs, but they belong in your overall profit rather than in the margin on one line.
Knowing the margin on one item is useful. Knowing it on everything is the point.
WadMaster records what each product cost you, so profit per item comes off your invoices without you working anything out.
Start free
Free plan · No card required