Start with the whole order
Write down the product or manufacturing cost, delivery, packaging, marketplace and payment fees, advertising and a realistic allowance for refunds or defects. Add regular overhead using a sensible order volume. Use a consistent tax basis and ask your accountant about recoverable VAT. The price advertised by a supplier is not necessarily the full landed cost.
Margin and markup are different
Here is a simplified illustration, not a fee quote: sell an item for £30, with £22 total modelled costs, and £8 remains. The margin is £8 divided by £30, or 26.7%. The markup over those costs is £8 divided by £22, or 36.4%. Confusing them can lead to a price below your intended margin. Real percentage fees may also change as your selling price changes.
Use more than the optimistic scenario
Run your planned price, a promotional price and a slower-sales case. Try a higher shipping cost and a larger returns allowance. A monthly subscription spread over 100 orders costs more per order if you complete only 25. Separate an introductory software discount from the regular cost. Remember that a calculated target price does not prove there is demand at that price.
Review the result after actual sales
Compare the estimate with settled orders rather than only the listing price. Track fees, ad spend and returns on the same basis over time. Identify which products use cash or time without contributing enough. A good margin still needs a cash plan: you may pay for stock before sales proceeds arrive. Use the product calculator for order economics and the 13-week planner for payment timing. They answer related but different questions.
YOUR NEXT STEP
Make the next move a clearer one.
- Include fulfilment, fees, ads, returns and regular overhead.
- Keep margin and markup calculations separate.
- Use a consistent VAT basis with professional advice where needed.
- Test a lower price and a slower-sales scenario.
- Compare estimates with actual settled orders.
Where we checked the details
Primary sources checked 11 October 2026. Rules, prices and eligibility can change. Confirm current terms with the official service.
General UK guidance and editorial checklists. Apply the official rules to your circumstances and seek qualified help where needed. This is researched guidance, not a claim that we have tested every provider or situation.
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