A seller says, “I add 30% for profit,” but that sentence can describe two very different calculations. Markup compares a surplus with cost. Margin compares that surplus with revenue. Both are useful, provided you label them correctly. Mixing them up often produces a price that looks deliberate on paper but leaves less money than the seller intended after a marketplace sale.
Use a small example before adding fees
Imagine a product with $20 of complete costs and no selling fees. A 30% markup adds $6, giving a $26 selling price. The resulting margin is $6 divided by $26, about 23.1%. A true 30% margin requires $20 divided by 0.70, or approximately $28.58. At that price the surplus is roughly 30% of the money the customer pays. The extra $2.58 is the consequence of changing the denominator, not an accounting trick.
Marketplace costs change the equation
On Etsy, some fees rise with revenue while others stay fixed per order or unit. Suppose your business costs are $20, listing allocation is $0.20, and the processing fixed fee is $0.25. Ignoring sales tax and Offsite Ads for this illustration, transaction and processing percentages together consume 9.5% of revenue. A 30% target margin must leave room for both that 9.5% and the fixed costs. Dividing complete fixed costs by 0.70 alone would overlook the percentage fees.
Work back from the right target
In this simplified no-shipping example, the unrounded relationship is price × (1 − 0.095 − 0.30) = $20.45. That produces a price near $33.80, before the small effects of rounding individual fee entries. The calculator searches cent prices using the modeled fees rather than presenting this shortcut as universally exact. If you select an Offsite Ads rate, a discount, or a multi-item order, the answer changes. Keep the inputs matched to the actual offer you intend to publish.
Decide what the margin must support
A margin is not automatically a wage. If you entered your production labor as a cost, profit is the surplus after that labor allowance. If you omitted labor, the same profit must pay you for the hours as well. It may also need to cover unallocated overhead, replacements, and slow inventory. Set the target with those distinctions in mind. A percentage that works for a repeatable digital file may not compensate for the uncertainty of a fragile custom product.
Compare like with like
When reviewing two listings, use the same definitions. One spreadsheet might include shipping in revenue and another might exclude it. One might deduct labor while another shows cash surplus only. Neither percentage can be compared fairly until the bases match. In Craft Margin, margin uses seller revenue including buyer-paid shipping and gift wrap, excluding sales tax collected by Etsy. Labor, when entered, is deducted before the profit figure. The methodology spells out the treatment so you can reproduce it.
A pricing check you can reuse
- Write down whether your goal is markup on cost or margin on revenue.
- List the business costs included in the target calculation.
- Use the target-margin price as a scenario, not evidence of customer demand.
- Compare that price with the market and improve costs or the offer if it is unrealistic.
A carefully calculated price still needs buyers. The calculation tells you what an order would earn at a stated price; it cannot establish whether that price will sell.
Put your own numbers beside the example. The calculator includes labor, shipping, fee bases, quantity, and Offsite Ads.
Calculate your order →Sources and scope
Fee references: Etsy's official fee overview, payment processing schedule, and Offsite Ads rules, checked November 3, 2026. These examples describe US sellers receiving USD through Etsy Payments. Business assumptions are illustrative, not a forecast or tax advice.