Profit margin on food supplements: how to calculate it

What is the difference between margin and markup

Margin is profit as a percentage of the selling price excluding VAT. Markup is profit as a percentage of the purchase price. If you buy for €5 and sell for €10 excluding VAT, your margin is 50 % and your markup is 100 %.

• Margin (%) = (selling price excl. VAT − purchase price) ÷ selling price excl. VAT × 100
• Markup (%) = (selling price excl. VAT − purchase price) ÷ purchase price × 100

Don’t mix them up: markup can be more than 100 %, margin is always below 100 %.

In the margin calculator and in the examples below, we calculate the margin more strictly, from the profit per unit. That is what is left after the channel’s commission and your other costs:

• Profit per unit = selling price excl. VAT − channel commission − purchase (product + label) − other costs per unit
• Margin on profit (%) = profit per unit ÷ selling price excl. VAT × 100

Why calculate with prices excluding VAT

If you are VAT-registered, the VAT on your sales goes to the tax authority, so your income is the selling price excluding VAT. To get it: price including VAT ÷ (1 + VAT rate).

Example: €24.00 including VAT at an example rate of 20 % is 24.00 ÷ 1.20 = €20.00 excluding VAT. The VAT on one unit is €4.00.

VAT rates are not the same across the EU. Each country sets its own rates within the limits of the VAT Directive: a standard rate of at least 15 % and up to two reduced rates of at least 5 % for goods and services listed in Annex III, which include foodstuffs (Your Europe). Whether food supplements get a reduced rate depends on the country and on how the product is classified. Check the current rate with your accountant. The 20 % in our examples is only an illustration.

If you are not VAT-registered, you don’t pay VAT on your sales, but you cannot reclaim the VAT on your purchases either. Any VAT you pay on a purchase is then part of your cost. More on setting up the business is in How to start a supplement brand.

Selling to consumers in other EU countries

If your online shop sells to consumers in several EU countries, the VAT rate can differ from order to order. While your total cross-border sales to consumers in other EU countries stay at or below €10,000 excluding VAT in both the current and the previous calendar year, you can generally charge the VAT of your own country. Above that, you charge the VAT of the customer’s country and can declare it through the One-Stop Shop (OSS).

For your margin, this means that the same shelf price brings in a different net price in each country. At €24.00 including VAT, an example rate of 25 % leaves €19.20 instead of €20.00, so your profit per unit falls by €0.80.

VAT on your purchase from us

Our prices are per unit, excluding VAT. Supplies to businesses with a valid EU VAT number in another member state are generally VAT-exempt (reverse charge); we state this on the invoice. You then account for the VAT in your own country. Details are in Sourcing supplements from another EU country.

What sales channels take

Your own online shop pays no commission, a marketplace takes a commission on each sale, and a pharmacy or other retailer works with its own margin. The actual percentages depend on your contract, so we don’t give typical figures here.

When you sell through a retailer, start from its margin on the retail price. If the retailer sells for €20.00 excluding VAT and its margin is 30 %, you invoice the retailer €14.00 excluding VAT.

Which other costs per unit to include

Besides the purchase price and the label, include everything you pay for each unit sold:

• shipping from the manufacturer to you, divided per unit (at FluidLabs it depends on the delivery address and is confirmed before payment),
• packaging and shipping to the customer, if the customer does not pay for it,
• payment provider or cash-on-delivery fees,
• storage and order fulfilment, if an external company handles them,
• advertising per order,
• a reserve for returned and damaged goods.

The margin calculator starts with €1.00 per unit. This is only a starting point; adjust it to your situation. Don’t leave out advertising: if you spend €3 to win one order of one unit, your profit per unit falls by €3.

Which one-off costs belong to the launch

One-off costs are paid once, whatever the number of units sold. Don’t add them to the price per unit; use them for the break-even point.

• Label design. Your designer creates the artwork. Printing and labelling by us is optional, at €0.30 per unit, with no set-up fee; this is a per-unit cost.
• Notification. In most EU countries, a food supplement must be notified to the competent national authority before it is placed on the market. Whether there is a fee depends on the country; see Food supplement notification in the EU.
• Trade mark, if you protect your brand name; see Trade mark for a supplement brand.
• Product photos and texts for your website and sales channels, in the language of each market.

How to calculate the break-even point

The break-even point is the number of units after which your profit covers the one-off costs. Break-even (units) = one-off costs ÷ profit per unit, rounded up.

Example: one-off costs of €300 ÷ a profit of €12.35 per unit = 24.3, so 25 units.

For cash planning, a second view helps: how many units you must sell to get back the money for the goods as well. For 50 units you pay 50 × €6.65 = €332.50 for the goods, or €632.50 together with the launch costs. Each unit sold in your own online shop brings in €19.00 (the price excluding VAT minus other costs). You get all the money back after selling 34 units; the rest is profit.

Worked examples

The same product at the same price gives very different profits in different channels. These are illustrative calculations. The selling price, VAT rate, commissions and costs are assumptions, not recommendations or market data.

Assumptions: Liposomal Vitamin C 1000 mg (200 ml), order of 50 units, €6.35 per unit excluding VAT (50–99 tier, price list valid from 8 October 2026), label €0.30 per unit, selling price €24.00 including VAT, example VAT rate 20 %, other costs €1.00 per unit, one-off costs €300. For the marketplace we assume a 15 % commission and for the retailer a 30 % margin, purely to show the arithmetic.

When you sell through a retailer, your other costs per unit are often different, because you ship in larger quantities. The table keeps them the same so the channels can be compared.

The order quantity changes the purchase price. With the same assumptions and sales in your own online shop:

A larger order raises the profit per unit by tens of cents, but ties up more money, and you have to sell the goods within their shelf life. For a start, consider a smaller quantity and order more once sales are proven. Current prices for all products are in the price list.

Run the numbers yourself

The margin calculator fills in the purchase price from our price list according to the quantity. You enter the selling price, VAT rate, channel and costs. It shows the profit per unit, margin, markup and break-even point.

Open the margin calculator

How we can help

At FluidLabs, prices per unit excluding VAT are public for every product in the product catalogue and the price list, so you can work out your margin before you contact us. We supply ready-made formulas from 25 units per product, with or without your label; the price per unit falls at 50, 100 and 250 units. For a quote on 1,000 units or more, use our enquiry form.