Trade-to-retail price calculator
Trade price in, shelf price out: pick a margin or a markup, add VAT, round it for the shelf, and see what each unit actually makes. Or go backwards from a price you already charge.
From trade price to shelf price
- Margin: selling price ex VAT = trade price ÷ (1 − margin). Markup: selling price ex VAT = trade price × (1 + markup).
- VAT is added after the margin and shown separately; it is not profit.
- Rounding moves the shelf price up to the nearest .99 or .95 (never down by more than 50p), then the margin shown is the real one after rounding.
- Trade price should be your net cost after supplier discounts and before VAT; carriage and settlement discount change it. The trade discount calculator works that out from the list price and hands it over here.
From a shelf price back to margin
Uses the trade price and VAT rate from the calculator above.
Margin and markup are not the same number
Markup is profit as a share of what you paid. Margin is profit as a share of what you sold it for. They describe the same sale with different denominators, and the gap between them grows as the number goes up. The classic mistake is adding 40% to cost and calling it a 40% margin: it is a 29% margin.
| Margin | Equivalent markup | £10 cost sells at (ex VAT) |
|---|---|---|
| 10% | 11.1% | £11.11 |
| 15% | 17.6% | £11.76 |
| 20% | 25% | £12.50 |
| 25% | 33.3% | £13.33 |
| 30% | 42.9% | £14.29 |
| 33.3% | 50% | £14.99 |
| 35% | 53.8% | £15.38 |
| 40% | 66.7% | £16.67 |
| 45% | 81.8% | £18.18 |
| 50% | 100% | £20.00 |
| 55% | 122.2% | £22.22 |
| 60% | 150% | £25.00 |
Margin = markup ÷ (1 + markup). Markup = margin ÷ (1 − margin).
Typical margins in a hardware store
- Heavyside and commodities (cement, aggregates, plasterboard, carcassing timber): 15–25%. Price-checked, bulky, competitive.
- Fixings, ironmongery, adhesives and sealants: 40–55%. Small, needed now, rarely price-compared.
- Hand tools and power tool accessories: 30–45%. Branded items sit at the lower end.
- Paint and decorating: 30–40% on branded, more on own-label.
- Cut-to-length, key cutting, loose fixings by weight: 60%+, because the service is the product.
Ranges, not rules. Your own blended margin is what matters: TradeSorter shows it by category from what you actually book in and sell.
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Common questions
Markup is the profit as a share of what you paid; margin is the profit as a share of what you sell for. A £10 item sold for £15 ex VAT has a 50% markup but a 33% margin. The two are often confused on price lists, and the difference is money: pricing for a '40% margin' by adding 40% to cost actually gives a 29% margin.
After. Work out your selling price ex VAT from the trade price and the margin you want, then add VAT on top. VAT is not yours: it goes to HMRC, so it should never be part of the margin calculation. The calculator does it in that order.
It varies by category. Fast-moving commodities such as cement, plasterboard and timber often run 15–25% margin; fixings, tools, paint and ironmongery 35–50%; and small consumables, keys and cut-to-length items higher still. The blended margin across a typical independent is around 30–35%.
Markup = margin ÷ (1 − margin). A 30% margin is a 43% markup; 40% margin is 67% markup; 50% margin is 100% markup. The table on this page lists the common pairs.
For consumer-facing retail, prices ending in .99 or .95 are the convention and measurably sell more. For trade customers who buy ex VAT on account, round figures are expected. The calculator can do either and shows what the rounding does to your margin.