3D printing profit margin vs markup, with a conversion table
The two formulas
- Markup on cost: price = cost × (1 + markup). The percentage is profit divided by cost.
- Margin on the sale: price = cost ÷ (1 − margin). The percentage is profit divided by price.
With a part that costs $10.00 and the same number, 30%, in both cases:
- 30% markup: $10.00 × 1.30 = $13.00. Profit is $3.00, which is 23.1% of the price.
- 30% margin: $10.00 ÷ 0.70 = $14.29. Profit is $4.29, which is 42.9% of the cost.
Both measure the same profit against a different base. Whenever there is a profit, cost is lower than price, so the same profit looks bigger when you express it as markup.
Markup to margin conversion table
To convert one into the other:
- margin = markup ÷ (1 + markup)
- markup = margin ÷ (1 − margin)
| Markup on cost | Margin on the sale | Price of a $10.00 part | Profit |
|---|---|---|---|
| 25% | 20.0% | $12.50 | $2.50 |
| 42.9% | 30.0% | $14.29 | $4.29 |
| 50% | 33.3% | $15.00 | $5.00 |
| 60% | 37.5% | $16.00 | $6.00 |
| 100% | 50.0% | $20.00 | $10.00 |
| 150% | 60.0% | $25.00 | $15.00 |
| 200% | 66.7% | $30.00 | $20.00 |
Exact math, no fees, on a $10.00 cost. The 60% row is the calculator's starting markup.
Notice that doubling the cost (100% markup) gives a 50% margin, not 100%. Margin can never reach 100%, because that would require a cost of zero; markup can go as high as you like.
The classic mistake: adding 30% and calling it a 30% margin
It shows up in three ways:
- When planning. If you want 30% of each sale to be profit and you add 30% to cost, you get 23.1%. A 30% margin needs a 42.9% markup.
- When discounting. The $10.00 part sold at $13.00 with 30% off goes for $9.10, and you pay $0.90 to sell it. Without fees, the largest discount before a loss is the margin (23.1% here), not the markup.
- When comparing. When someone says "I work at 50%", ask: 50% of what? On cost, a $10.00 part sells for $15.00; on the sale, for $20.00.
How fees eat your margin
Suppose a part that costs $25.00, a 60% markup, a 14% marketplace fee and a 6% tax taken out of the sale price. There are two ways to set the price:
| How the price was set | Price | Fees and tax (20%) | Profit | Profit on cost | Margin on the sale |
|---|---|---|---|---|---|
| 60% markup, fees taken out afterwards | $40.00 | $8.00 | $7.00 | 28% | 17.5% |
| Fees in the divisor, as the calculator does | $50.00 | $10.00 | $15.00 | 60% | 30% |
A worked example: the 14% fee and 6% tax are example values, not any platform's rate.
The first way turns the planned 60% into 28%: of the $15.00 of profit you expected, fees took $8.00, more than half. In the second, the price is $25.00 × 1.60 ÷ (1 − 0.14 − 0.06) = $50.00. Fees and tax take $10.00, $40.00 is left, and profit is exactly 60% of cost. The margin on the sale is 30%, not the 37.5% from the table, because the price now carries money that is not yours.
The 6% stands for a tax that comes out of the price, the way VAT does in many countries. In most US states, sales tax is added at checkout instead, and marketplaces like Etsy collect it, so it does not come out of your price; the guide to how much to charge explains where each one goes.
Fixed fees do the same damage, only bigger on cheap parts: a $1.00 fee is 2% of a $50.00 sale and 10% of a $10.00 one. Each platform's current fees are in the guide to selling fees.
What margin makes sense for each sales channel
There is no published benchmark margin for 3D printing by sales channel; the numbers passed around in groups and forums are the opinion of whoever wrote them. What you can do with confidence is know what each channel takes out of the price and test the result.
| Channel | What comes out of the price | What weighs on your markup |
|---|---|---|
| Friends and family | nothing | no markup: sell at cost |
| Direct sale (Instagram, local, craft fair) | card or payment app fee, if any | you keep the whole markup, but time spent answering messages is labor |
| Marketplace | percentage fee, fixed fee, any tax in the price | buyers compare prices side by side; fees go in the divisor |
| Business (B2B) | card or invoice payment fees, if any | batches spread prep time; payment terms hold your money |
| Custom one-off | depends on the channel | modeling is labor, and the chance of a reprint is higher |
The test is profit per printer hour. Next to the expected profit, the calculator shows the return per hour of printing. On the 5-hour part from the guide to how much to charge, $13.39 of profit is $2.68 per machine hour. If a channel earns less per hour and ties up the same printer, it has to make up for it another way: guaranteed volume, payment up front, a customer who comes back.
Be careful with lowering the markup to sell more, too. At 30% instead of 60%, profit per part is cut in half, and you need to sell twice as many parts to earn the same at the end of the month.
In the MakerPrice 3D calculator
- The field is called "Markup on cost" and starts at 60%. It is a markup: the percentage multiplies the cost.
- The results show the "Margin on the sale", which is profit divided by price, after the fees and tax you turned on. In the $50.00 example, it shows 30%.
- To aim for a margin, use markup = margin ÷ (1 − margin). For a 40% margin with no fees, enter 66.7. With fees on, adjust the markup until the margin shown reaches the number you want.
- For tax, "Deduct from the sale amount" puts the percentage in the divisor, as in the example; "Add to the price" charges it on top of the price, like US sales tax.
Frequently asked questions
Is contribution margin the same thing?
No. Contribution margin is what is left of the price after variable costs, such as material, electricity and fees, before the fixed costs of the month, such as rent and subscriptions. The margin in this guide comes from the full cost of the part, which already includes printer wear and your time, so it is never higher than the contribution margin.
Can margin go above 100%?
Margin on the sale cannot: reaching 100% would require a cost of zero. Markup can. A $10.00 part sold for $35.00 has a 250% markup and a 71.4% margin.
Does labor go in cost or in profit?
In cost. If you leave it out, your "profit" only pays for your time and the business earns nothing. With labor in the cost, the markup is what is left after you are paid for your hours.
What is the largest discount I can give without losing money?
Without fees, it is the margin on the sale. With percentage fees, work it out on the net amount: maximum discount = 1 − cost ÷ (price × (1 − fees)). For the $50.00 part with 20% in fees and a $25.00 cost, the limit is 1 − 25 ÷ 40 = 37.5%.
Should every part get the same markup?
It does not have to. Small, cheap parts suffer more from fixed fees and from customer service time, which does not shrink with size; large parts tie up the printer for more hours. Compare the profit per hour of each before deciding.