What is the difference between markup and margin?

Markup is the percentage added on top of cost price (e.g. 100% markup on a £5 product = £10 retail). Margin is the percentage of the retail price that is profit (e.g. 50% margin on a £10 product = £5 profit). A 100% markup equals a 50% margin.

What markup should a salon use on retail products?

UK salons typically markup retail products by 80-120%, giving a profit margin of 44-55%. Professional-only brands often have a recommended retail price (RRP) that gives roughly 40-50% margin. Higher markups are common on accessories and own-brand products.

Do I need to charge VAT on salon retail products?

If your salon is VAT-registered (turnover above £85,000), you must charge 20% VAT on retail product sales. The VAT is added on top of your retail price. If you are not VAT-registered, you do not charge VAT but also cannot reclaim VAT on stock purchases.

How do I calculate return on investment for stock?

ROI = (Total profit / Total investment) x 100. If you invest £500 in stock and sell it for £1,000, your profit is £500 and your ROI is 100%. Higher ROI means your money works harder. Consider stock turnover speed — fast-selling products at lower margin can beat slow sellers at higher margin.

CutCalcs

Retail Markup Calculator — Product Pricing for Salons

Calculate retail price, profit margin, and ROI for salon product sales.

Cost Price (ex VAT)

Your trade or wholesale price per unit

Pricing Method

Choose how you want to set your price

Markup Percentage

Percentage added to cost price

Quantity

Number of units purchased/in stock

Include VAT

Add UK VAT to the retail price

How We Calculate This

Markup Method

Retail = Cost x (1 + Markup %)

Margin Method

Retail = Cost / (1 - Margin %)

VAT is added on top of the retail price if your salon is VAT-registered. ROI measures the return on your stock investment across the quantity purchased.

Frequently Asked Questions

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Last updated: March 2026

All calculations are estimates. Always perform a strand test before chemical services.