Two numbers that sound the same
Markup compares your profit to what you paid for the product. Margin compares your profit to what the buyer paid you.
Markup = (price − cost) ÷ cost
Margin = (price − cost) ÷ price
Buy something for ₱100 and sell it for ₱150. You made ₱50. That's a 50% markup, because ₱50 is half of ₱100. It's only a 33% margin, because ₱50 is a third of ₱150.
Markup will always be the bigger number, which is why it feels better to quote. But margin is the one that tells you how much of each sale you keep.
Why margin matters more when you sell online
Every marketplace fee is a percentage of the selling price, not of your cost. Commission, transaction fees and shipping-related fees all come out of the price. So the natural way to think about them is the same way you think about margin: as a share of the price.
Here's the useful part. If fees take 18% of your price and you want a 20% margin, then your product cost has to fit in the remaining 62%. Your price is cost ÷ 0.62.
Price = cost ÷ (1 − fee % − target margin %)
The markup you actually need
This table shows how much markup on cost you need to reach a real margin, after percentage fees. Shopee's typical Marketplace fees come to around 18%, TikTok Shop's around 15%, and Lazada's around 11% before program fees. It ignores the small per-order fee, which makes low-priced items need even more.
| Margin you want | Fees take 11% | Fees take 15% | Fees take 18% |
|---|---|---|---|
| 10% | 26.6% markup | 33.3% markup | 38.9% markup |
| 20% | 44.9% markup | 53.8% markup | 61.3% markup |
| 30% | 69.5% markup | 81.8% markup | 92.3% markup |
Read the 18% column. To keep 20 centavos of every peso on Shopee, you need to price at more than 1.6 times your cost. The "add 50%" habit leaves you with about a 15% margin there, before packaging, ads or returns.
Three mistakes that shrink margins
Forgetting per-order costs
Packaging, the platform's per-order fee and any free gift add a fixed amount to every order. On a ₱1,500 item, ₱20 barely matters. On a ₱99 item, it's a fifth of the price. Low-priced products need a higher markup or a bundle.
Giving discounts on the markup
A 20% discount on a product with a 50% markup doesn't leave 30% profit. Fees are charged after the discount, but your cost doesn't drop. Check every promo price on a fee calculator before the sale starts.
Using one price for every platform
Because fees differ, the same price gives a different margin on each platform. Price each listing for the same margin instead.
Do it in seconds
The selling price calculator does this math with each platform's real fee rules, including caps and per-order fees. Enter your cost and target margin, and it gives you the price to set on Shopee, Lazada and TikTok Shop.