Shipping markup calculator
Enter what shipping costs you and how you want to mark it up. This shows what to charge, and — separately, because they are different numbers — your markup and your margin.
Markup and margin are not the same number
This trips up more sellers than any other piece of shipping arithmetic. If a shipment costs you $8 and you charge $10:
- Your markup is $2 on $8, which is 25%.
- Your margin is $2 on $10, which is 20%.
Same two numbers, same $2, two different percentages. Markup is measured against what you paid; margin is measured against what you charged. Margin is always the smaller of the two, and it is the one that tells you what share of the money you keep.
Worked example
Postage $6.13, packaging $0.42, charging the customer $8.45.
- The shipment costs you $6.55.
- You charge $8.45, so your markup is $1.90.
- That is 29% markup on cost, or 22.5% margin on the charge.
- At a 13.25% marketplace fee on the $8.45, the fee is $1.12, so you actually keep $0.78.
Edge cases worth knowing
- Marketplace fees usually apply to shipping too. Charging exactly what postage costs still loses money once the fee comes off.
- Free shipping is not free. It is a markup of zero with the cost buried in the item price, which is a pricing decision rather than a saving.
- Overcharging for shipping is visible. Buyers compare the shipping line, and some marketplaces cap it.
- Packaging is a real cost. A box, tape, and void fill on every order adds up faster than most sellers expect.
Common questions
- What is a reasonable shipping markup?
- Enough to cover packaging and the fee charged on the shipping you collect. Beyond that it is a pricing decision, not a formula, and buyers do notice.
- Should I include packaging in the shipping charge?
- It has to be recovered somewhere, either in the shipping charge or the item price. This calculator lets you put it in the cost so the markup covers it.
- Why is my margin lower than my markup?
- Because margin divides by the larger number. A 100% markup is a 50% margin; they are the same transaction described two ways.
- Are these amounts exact?
- Yes. Everything is calculated in whole cents, and each percentage fee is rounded once, so the totals will match a statement to the penny.