Markup vs margin: the pricing error that quietly erodes marketplace profit

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A common mistake among small sellers is confusing markup, which measures profit against cost, with margin, which measures profit against price. The article notes that marketplace and payment fees are charged on the sale price, so a seemingly healthy markup can leave very little profit. Using an illustrative fee stack of 13% plus a $0.30 fixed fee, a $26 price for a $20 item yields only about a 9% margin instead of the intended 30%. Solving for the price that delivers a 30% margin gives roughly $35.62. The author also shows that a 20% discount can cut profit by more than half, and that discounts beyond about 34% lead to losses on each sale.

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