Profit margin calculator
Enter what an item costs you and what you sell it for to see your margin and markup. Or enter the margin you want and get the price to charge.
Profit margin
40.00%
Markup
66.67%
The formulas, with your numbers
- Profit = price − cost = 100.00 − 60.00
- 40.00
- Margin = profit ÷ price × 100
- 40.00%
- Markup = profit ÷ cost × 100
- 66.67%
How to calculate profit margin
Subtract the cost from the selling price to get the profit, then divide the profit by the price and multiply by 100. An item that costs 60 and sells for 100 makes 40 profit, a 40% margin.
- Profit = price − cost
- Margin % = profit ÷ price × 100
- Markup % = profit ÷ cost × 100
- Price for a target margin = cost ÷ (1 − margin %)
Margin and markup are not the same
Margin is profit as a share of the price; markup is profit as a share of the cost. The same sale gives two different numbers: adding a 50% markup to a 10 item prices it at 15, which is a 33.33% margin. Pricing with a markup when you meant a margin leaves you with less profit than you planned.
What to count as cost
For the margin on one product, include everything it costs to get one unit to a customer: the product or materials, packaging, and any per-sale shipping, payment processing and marketplace fees you pay. Rent, software and other fixed costs come out of the profit that is left.