Profit Margin and Markup Calculator
Profit Margin and Markup Calculator - Price Your Products Right
This free profit margin calculator shows your profit, margin and markup from cost and price, or finds the selling price you need for a target margin or markup. It works in any currency, which makes it useful for shop owners, online sellers, freelancers and small businesses everywhere.
Margin vs Markup: What Is The Difference?
Both measure profit, but from a different base. Markup is profit divided by cost. Margin is profit divided by selling price. Mixing them up is a very common pricing mistake that leaves sellers with less profit than they planned.
- Profit = Selling price - Cost
- Margin % = Profit / Selling price x 100
- Markup % = Profit / Cost x 100
- Price for a target margin = Cost / (1 - Margin)
- Price for a target markup = Cost x (1 + Markup)
Markup To Margin Chart
| Markup | Margin |
|---|---|
| 10% | 9.09% |
| 25% | 20% |
| 50% | 33.33% |
| 75% | 42.86% |
| 100% | 50% |
| 150% | 60% |
Example
A product costs 60 and sells for 100. Profit is 40. Margin = 40 / 100 = 40%. Markup = 40 / 60 = 66.67%. If you wanted a 50% margin on the same cost, the price would need to be 60 / 0.5 = 120.
Pricing Tips
- Include every cost: materials, packaging, shipping, fees and your time.
- Decide your target margin first, then work out the price.
- Remember discounts reduce margin faster than most people expect.
- Review prices regularly when your costs change.
Frequently Asked Questions (FAQs)
Q: What is the difference between margin and markup?
A: Markup is profit as a percentage of cost, while margin is profit as a percentage of the selling price. A 25% markup equals a 20% margin.
Q: How do I calculate profit margin?
A: Margin % = (Selling price - Cost) / Selling price x 100. For a cost of 60 and price of 100, margin is 40%.
Q: How do I calculate markup?
A: Markup % = (Selling price - Cost) / Cost x 100. For a cost of 60 and price of 100, markup is 66.67%.
Q: How do I price a product for a target margin?
A: Selling price = Cost / (1 - Margin %). For a cost of 60 and a 40% margin, the price is 100.
Q: Can margin ever be higher than 100%?
A: No. Margin cannot exceed 100% because profit cannot be bigger than the selling price. Markup can be above 100%.
Q: Does this include taxes and fees?
A: No. Add platform fees, shipping and taxes to your cost if you want a true profit number, or use our seller profit calculator for marketplaces.