Profit Margin Calculator

Work out profit margin and markup from cost and price, or the price you need for a target margin.

I want to work out

Margin from cost and pricePrice for a target marginPrice from a markupMost I can pay for it

Profit margin 37.5% · markup 60%

Cost per unit

What one unit costs you, landed, plus fees and shipping if you want them counted.

Selling price

Before sales tax or VAT.

Profit margin

You keep $15.00 of every $40.00 sale.

37.5%

Selling price	$40.00
Cost	$25.00
Profit per unit	$15.00
Marginprofit ÷ price	37.5%
Markupprofit ÷ cost	60%

Price for each margin at a cost of $25.00

Margin	Price	Profit	Markup
10%	$27.78	$2.78	11.1%
20%	$31.25	$6.25	25%
30%	$35.71	$10.71	42.8%
40%	$41.67	$16.67	66.7%
50%	$50.00	$25.00	100%
60%	$62.50	$37.50	150%
70%	$83.33	$58.33	233.3%
80%	$125.00	$100.00	400%

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How it works

Choose what you want to work out, then enter the two numbers it needs. The example values show a result straight away; replace them with yours. Nothing you type leaves your browser.

Profit is the selling price minus the cost of one unit. Margin is that profit as a share of the selling price, the figure most accounts and marketplaces use. Markup is the same profit as a share of the cost, the figure many wholesalers and retailers price with. The two describe the same sale, so the calculator shows both.

Price for a target margin divides the cost by one minus the margin. Price from a markup multiplies the cost by one plus the markup. Prices are rounded to the cent, and the margin and markup in the result are worked out again from the rounded price, so they match what you’ll actually make.

Most I can pay for it works backwards from a price you can’t change, such as a competitor’s or a marketplace’s usual price. It takes the margin you need off the price and shows the highest cost per unit that still leaves it, which is useful before you agree a price with a supplier.

The table under the calculator lists the price you’d need at margins from 10% to 80% for the same cost, with the profit and markup at each. What you put in the cost decides what the margin means: product cost alone gives a gross margin, and adding fees and shipping per unit gives a margin after selling costs.

Example

A product costs $25.00 a unit, landed. Four ways to look at its price:

Question	Working	Answer
Margin if it sells for $40.00	($40 − $25) ÷ $40	37.5%
Markup at $40.00	($40 − $25) ÷ $25	60%
Price for a 40% margin	$25 ÷ (1 − 0.40)	$41.67
Price with a 40% markup	$25 × 1.40	$35.00

A 40% markup and a 40% margin are not the same price: $35.00 leaves a 28.6% margin, while $41.67 leaves 40%. Working the other way, if similar products sell for $60.00 and you need a 35% margin, the most you can pay the supplier is $60.00 × 0.65 = $39.00 a unit.

FAQ

How do I calculate profit margin?

Subtract the cost from the selling price to get the profit, then divide the profit by the selling price and multiply by 100. A product that costs $25 and sells for $40 makes $15 profit, and 15 ÷ 40 = 37.5% margin. Margin always uses the selling price as the base, so it can never reach 100%.

What is the difference between margin and markup?

Both start from the same profit, but they divide it by different numbers. Margin divides profit by the selling price; markup divides it by the cost. The $15 profit on a $25 item sold for $40 is a 37.5% margin and a 60% markup. Markup is always the larger figure, and a 100% markup is only a 50% margin.

How do I price a product for a target margin?

Divide the cost by one minus the margin as a decimal. For a 40% margin on a $25 cost, that’s 25 ÷ 0.60 = $41.67. Adding 40% to the cost instead gives $35, which is only a 28.6% margin, the most common pricing mistake. Choose Price for a target margin and the calculator does this for you.

What is a good profit margin for an online store?

It depends on what the margin has to pay for. If your cost only includes the product, the margin still has to cover marketplace and payment fees, shipping, advertising, returns and overheads. Work those per-unit costs into the cost field to see the margin left after them, and use the break-even ROAS calculator to see how much of it ads can take.

What should I include in the cost?

For a gross margin, use the landed cost of one unit: the supplier’s price plus freight, insurance and import duty. For a margin closer to profit, also add the per-unit costs of selling it, such as platform and payment fees, packaging and the shipping you pay. Leave out fixed monthly costs like rent and software.

Should the selling price include sales tax or VAT?

No. Sales tax and VAT are collected for the government, not kept as revenue, so enter the price without them. If you sell in the UK at £24 including 20% VAT, enter £20. In the US, marketplace prices are usually shown before sales tax, so the listed price is the one to use.