Profit Margin Calculator
Work out gross profit, margin and markup from a cost and a price, or find the price you need for a target margin.
How to calculate profit margin
Gross profit is what's left of the selling price after the cost of the product. Profit margin shows that profit as a share of the selling price, so you can compare products with very different prices.
Margin = Gross profit ÷ Price × 100
Markup = Gross profit ÷ Cost × 100
Price for a target margin = Cost ÷ (1 − Target margin ÷ 100)
Worked example
A product costs $20 and sells for $50. The gross profit is $30, so the margin is 30 ÷ 50 = 60% and the markup is 30 ÷ 20 = 150%. To reach a 70% margin, the price would need to be 20 ÷ 0.3 = $66.67.
Margin and markup are not the same
Margin and markup describe the same profit from different starting points. A 50% markup gives a 33.3% margin, and a 100% markup gives a 50% margin. Mixing them up is a common way to price products too low: if you want a 50% margin, adding 50% to the cost is not enough.
Profit margin calculator FAQ
What is a good profit margin for an online store?
It depends on what you sell and how you sell it. Check that each sale leaves enough gross profit to pay for advertising, shipping, payment fees and overheads, and track your margin over time rather than against a single benchmark.
Is profit margin the same as markup?
No. Both use the same profit, but margin divides it by the selling price and markup divides it by the cost. A product that costs $20 and sells for $50 has a 60% margin and a 150% markup.
Why can't my margin reach 100%?
A 100% margin would mean the product cost nothing. Margin is a share of the selling price, so it always stays below 100% as long as the product has a cost. Markup has no such limit.
Is this gross margin or net margin?
Gross margin per product. Net margin also takes off your operating costs, such as advertising, software and salaries. Use the Store Profit Calculator to estimate net profit for your whole store.