What is the difference between margin and markup?

Margin is profit as a percentage of selling price. Markup is profit as a percentage of cost. A 50% margin means half the price is profit; a 50% markup means you charge 1.5x your cost.

What is a good profit margin for handmade items?

Most craft businesses aim for 40-60% gross margin and 20-40% net margin. Unique, highly skilled or bespoke items can command higher margins.

What is included in cost of goods?

Cost of goods includes all direct costs: materials, components, labels, packaging and your labour time. Overheads like rent and insurance are typically separate.

Why is net margin lower than gross?

Net margin deducts additional costs like platform fees, payment processing and postage that gross margin does not include.

CraftCalcs

Profit Margin Calculator — Gross & Net Margins

Calculate gross and net profit margins on your handmade products.

Selling Price

Cost of Goods

Materials + labour + packaging

Platform Fees

Etsy, PayPal, Stripe etc.

Postage Cost

How We Calculate This

Gross Profit = Selling Price - Cost of Goods. Gross Margin = (Gross Profit / Selling Price) x 100.

Net Profit = Selling Price - Cost of Goods - Platform Fees - Postage. Net Margin = (Net Profit / Selling Price) x 100.

Markup = ((Selling Price - Cost) / Cost) x 100, showing how much you have added on top of your cost.

Frequently Asked Questions

Related Calculators

Cost Per Item Calculator

Calculate the total cost to make each item including materials, time and overheads.

Selling Price Calculator

Work out the right selling price based on costs, desired margin and platform fees.

Material Cost Calculator

Track and total material costs across multiple supplies for a project.

Time Calculator

Calculate your effective hourly rate from time spent and items produced.

Market Stall Calculator

Work out break-even and profit targets for craft market stalls and fairs.

Last updated: 2025-02-20

All calculations are estimates. Always verify quantities before purchasing materials.