How do margin and markup use different bases?
Both margin and markup start with the same gross profit: selling price minus cost. The difference is what you compare that profit with. Margin uses selling price. Markup uses cost.
For an online seller with a $60 cost and a $100 selling price, profit is $40. The margin is $40 ÷ $100 = 40%. The markup is $40 ÷ $60 = 66.67%. These are two ways of describing the same sale.
Why adding your target percentage can fall short
Suppose you want a 30% margin on a product that costs $70. Multiplying $70 by 1.30 gives a $91 price. That leaves $21 profit, which is only 23.08% of the $91 revenue.
Instead, divide $70 by 1 − 0.30. The resulting $100 price leaves $30 profit: exactly 30% of revenue, before other costs.
Leave room for the costs of selling
A percentage payment fee grows with the selling price. A fixed transaction fee does not. To target a margin after both, divide unit cost plus fixed fee by 1 minus target margin minus percentage fee.
Shipping, packaging, marketplace charges, and fulfillment may belong in your unit cost. List each cost once. The resulting unit margin still needs to cover monthly overhead and any costs you have excluded.
Use a consistent definition
When reviewing a supplier quote or discussing prices with a business partner, ask whether the percentage refers to margin or markup, and which costs have been included. The label matters as much as the number.
Calculate your target price, round it up to a usable currency unit, then check the margin at the final price. A calculated target is a planning input; demand and competitor pricing still affect what you can sell.