Profit Margin Calculator
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Enter your cost and either a selling price or a target margin. The calculator returns your profit, margin and markup, or works backwards to find the price you need to hit a desired margin. All math runs on your device.
Profit, margin and markup defined
These three numbers describe the same transaction from different angles, and mixing them up is one of the most common pricing mistakes. Profit is the simplest: profit = price − cost. It is the raw money left over after you cover what the item cost you.
Margin expresses that profit as a share of the selling price: margin % = profit / price × 100. Markup expresses it as a share of the cost instead: markup % = profit / cost × 100. Because the denominators differ, markup is always the larger percentage for the same sale. Quoting one when you mean the other can quietly erode your profitability.
Working backwards from a target margin
Often you do not know the price yet — you know your cost and the margin you need to stay healthy. Rearranging the margin formula gives price = cost / (1 − margin / 100). This tool does that for you in target-margin mode.
Notice the margin must be below 100%: you cannot price so that profit equals or exceeds the entire selling price. As margin approaches 100%, the required price shoots toward infinity, which the calculator guards against. A common error is to add the margin percent to the cost as if it were markup; using the correct division formula avoids underpricing.
When to use margin versus markup
Retailers and finance teams usually think in margin because it ties directly to the top line of an income statement and is easy to compare across products of different prices. Buyers, wholesalers and many trades think in markup because they start from a known cost and add a percentage on top.
- Use margin to see how much of each sale you actually keep
- Use markup when setting prices from a known cost base
- Remember a high markup can still be a modest margin
- Convert consistently so quotes and reports agree
Caveats for real-world pricing
This calculator works at the unit level and uses the direct cost you enter. It does not include overhead, shipping, payment fees, returns or taxes, all of which shrink your true net margin. Treat the gross margin it reports as a ceiling and subtract those costs separately.
For a full picture, run your fully loaded cost through the tool rather than just the purchase price of the goods. That way the margin you see is closer to what actually lands in your business.
Frequently asked questions
Can margin ever be 100% or more?
Only if your cost is zero. As long as an item costs you something, its margin is always below 100%, which is why the target-margin mode requires a value under 100.
Why is my markup higher than my margin?
Markup divides profit by the smaller number (cost) while margin divides by the larger number (price). For the same profit, dividing by a smaller base always gives a bigger percentage.
Does this show gross or net margin?
It shows gross margin based on the cost you enter. Net margin also subtracts overhead, fees and taxes, so enter a fully loaded cost if you want a figure closer to net.
How do I convert markup to margin?
Margin = markup / (1 + markup). For example a 100% markup equals a 50% margin. This tool shows both at once so you rarely need to convert by hand.
Can I use it for services, not just products?
Yes. Enter your delivery cost as the cost and your quoted fee as the price, and the profit, margin and markup apply just the same.
Is any information stored?
No. All calculations happen locally in your browser and no data leaves your device.
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