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How to Price Products to Sell Online: Margin, Markup and Fees

NetMoneyLab ยท Oct 22, 2026

In practice

the math takes about 15 minutes per product and needs only your cost, your per-sale fees and the profit you want. The costliest mistake is mixing up markup and margin, which can quietly cut a third of the profit you planned.

Which costs go into the price?

Shopify splits costs into two groups. Fixed costs are what you pay for a period regardless of sales: rent, salaries, insurance, equipment, software and marketing.

Markup versus margin: what is the difference?

Markup is profit as a percentage of cost. Margin is profit as a percentage of the selling price.

How to calculate the price, step by step

Check: 20% of $17.85 is $3.57, and $14.28 + $3.57 = $17.85. The profit really is 20% of the price.

A marketplace example with per-sale fees

The numbers below are ours and illustrative, not a real platform's rates. Say a product costs you $15, packaging is $1 and inbound shipping is $1, total $17.

What happens to the margin when you discount?

Each discount cuts the price, but cost and fixed fees stay put. On the $25 item, a 10% discount brings it to $22.50.

How to Price Products to Sell Online: Margin, Markup and Fees

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