Fashion Retail Margin & Markup Calculator

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Category Business & Trade

Cost of Goods (Bulk/Total)Total UnitsOverhead/Misc Costs (Total)Tax Region (VAT/Sales Tax)

Calculation Method:

Target Percentage (%)

Per Unit Breakdown

Landed Cost (Unit):-

Net Profit (Unit):-

Pre-Tax Price:-

Tax Amount:-

Final Shelf Price:-

Analysis

Actual Markup:-

Actual Margin:-

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About

Pricing errors in fashion retail often stem from confusing markup with gross margin. Markup is added to the cost price to determine the selling price. Margin is the percentage of the selling price that is profit. Confusing these two results in selling inventory below the break-even point. This tool standardizes the pricing strategy by factoring in Value Added Tax (VAT) and specific operational overheads like packaging or import duties.

Accurate unit economics require allocating bulk costs across individual stock keeping units. Shipping a container involves fixed costs that must be divided by the total quantity to find the true landed cost per unit. Neglecting this dilutes profit. This calculator integrates variable and fixed costs to determine the exact price floor needed to sustain business operations.

Formulas

The distinction between markup and margin is mathematically rigorous.

Markup Pricing:

P = C × (1 + M_k)

Gross Margin Formula:

M_g = P − CP × 100

Break-Even Analysis:

BE = Fixed CostsP − C_v

Where P is Price, C is Cost of Goods Sold, M_k is Markup percentage, and M_g is Margin percentage.

Reference Data

Country / State	Standard VAT/Sales Tax	Reduced Rate (Apparel)	Zero Rated Items
United Kingdom	20%	0% (Children)	Children's Clothes
California (USA)	7.25% (Base)	N/A	N/A
New York (USA)	4.0% (Base)	0% (Under $110)	Clothing <$110
France	20%	10%	N/A
Italy	22%	10%	N/A
Germany	19%	7%	N/A
Spain	21%	10%	N/A
Japan	10%	N/A	N/A
Australia	10% (GST)	N/A	N/A
Canada (Ontario)	13% (HST)	5% (Fed only)	Children's Clothes
India	12% (Apparel >1000₹)	5% (Apparel <1000₹)	N/A
Brazil	17-25% (ICMS)	Varies	N/A
Sweden	25%	N/A	N/A
Netherlands	21%	N/A	N/A

Frequently Asked Questions

Markup is calculated on the cost, while margin is calculated on the revenue. A 50% markup on a $100 item results in a $150 price. The profit is $50. The margin is $50 divided by $150, which equals 33.3%.

Inbound shipping is part of the Cost of Goods Sold (COGS). Divide the total freight bill by the number of units received. This "landed cost" is the true baseline for calculating markup, not the manufacturer's invoice price.

VAT or Sales Tax is strictly collected on the final selling price. You calculate your selling price based on costs and desired margin first, then apply the tax rate on top of that total to get the shelf price.

Standard industry keystoning implies a 50% gross margin (100% markup). However, luxury goods often command 65-75% margins, while fast fashion may operate on thinner margins of 35-40% relying on high volume.