Margin Calculator
Enter what a product costs you and what you sell it for to see your profit margin, markup and profit. Or start from the margin you want and get the selling price.
Results
Margin = profit ÷ selling price · Markup = profit ÷ cost
How to calculate profit margin
Gross profit margin is the share of the selling price you keep after paying for the product: margin = (selling price − cost) ÷ selling price. A product you buy for $60 and sell for $100 leaves $40 of profit, which is a 40 % margin.
Markup measures the same profit against the cost instead of the price: markup = (selling price − cost) ÷ cost. The same product has a 66.7 % markup. Margin can never reach 100 %; markup can.
To price from a target margin, divide the cost by (1 − margin). For a 40 % margin on a $60 cost: 60 ÷ 0.6 = $100. Adding 40 % to the cost would only give $84, which is a 28.6 % margin.
Worked example
- Cost: $60 · Selling price: $100
- Profit = 100 − 60 = $40
- Margin = 40 ÷ 100 = 40 %
- Markup = 40 ÷ 60 = 66.7 %
Markup to margin conversion chart
The most common pricing mistake is treating a markup as a margin. Use this chart to see what margin a given markup really gives you.
| Markup | Margin |
|---|---|
| 10 % | 9.1 % |
| 20 % | 16.7 % |
| 25 % | 20 % |
| 30 % | 23.1 % |
| 40 % | 28.6 % |
| 50 % | 33.3 % |
| 60 % | 37.5 % |
| 75 % | 42.9 % |
| 100 % | 50 % |
| 150 % | 60 % |
| 200 % | 66.7 % |
How to set a price with a target margin
- 1
Add up your real cost
Purchase price plus shipping, packaging and payment fees for one unit.
- 2
Pick your target margin
The share of the price you need to keep to cover overheads and profit.
- 3
Compute the price
Price = cost ÷ (1 − margin). The calculator does it in the "Cost + target margin" tab.
- 4
Check it against the market
Compare with competitors and round to a price point your customers expect.
Frequently asked questions
What is a good profit margin?+
What is the difference between margin and markup?+
How do I calculate the selling price from a margin?+
Should I use prices with or without sales tax?+
Is this margin calculator free?+
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