Profit Margin & Markup Calculator
Find profit margin, markup, or selling price.
Pricing & cost inputs
Changing currency only changes the currency used for your entered values and results; it does not convert exchange rates.
Your entered unit cost may exclude other COGS, overhead, fees and taxes.
What you charge for one unit.
Pricing & profit breakdown
Enter cost and a pricing value to see the result.
Calculate profit margin and markup
Enter your unit cost and either your actual selling price or your target margin/markup percentage to solve for all four pricing metrics together. The calculation runs in your browser; review the site privacy policy for other data handling.
Result Interpretation: Margin vs. Markup
- Profit Margin (%): Expresses your profit as a percentage of the final selling price. It answers: "Of every dollar a customer hands you at the register, what percentage do you keep as gross profit?"
- Markup Percentage (%): Expresses your profit as a percentage of your baseline unit cost. It answers: "What percentage did you add on top of what you paid wholesale?"
- Why They Are Different: A 50% markup on a $40 cost yields a $60 price and a $20 profit - but that $20 profit represents only a 33.33% margin on the $60 sale.
- Gross Profit per Unit: The difference between selling price and unit cost before deducting business overhead, warehouse rent, marketing, merchant payment fees, or employee wages.
How to Use This Calculator
- Enter your unit cost: Type what you paid for the product, raw material, or wholesale inventory item.
- Choose your second known variable: Select whether you know your current selling price, your target profit margin %, or your target markup %.
- Instant simultaneous solution: The engine automatically solves and displays the target selling price, unit profit, margin %, and markup % side by side.
- Evaluate pricing viability: Compare the difference between markup and margin, then account for overhead, taxes, fees, and other costs that are not part of the entered unit cost.
Formulas & Calculation Logic
The mathematics behind product pricing and gross margins:
When Starting from Cost & Selling Price:
profit = selling_price − costmargin_percent = (profit ÷ selling_price) × 100markup_percent = (profit ÷ cost) × 100When Solving from Cost & Target Margin:
selling_price = cost ÷ (1 − (target_margin ÷ 100))profit = selling_price − costmarkup_percent = (profit ÷ cost) × 100When Solving from Cost & Target Markup:
selling_price = cost × (1 + (target_markup ÷ 100))profit = selling_price − costmargin_percent = (profit ÷ selling_price) × 100Monetary results use the selected currency’s standard display precision; percentage metrics round to two decimal places. Internal calculations use full numeric precision.
Real-World Worked Examples
Example 1: Starting from Cost and Selling Price
A boutique buys an item for $40.00 wholesale and lists it at $60.00 retail:
- Unit Cost: $40.00
- Selling Price: $60.00
- Profit:
$60.00 − $40.00 = $20.00 - Profit Margin:
($20.00 ÷ $60.00) × 100 = 33.33% - Markup Percentage:
($20.00 ÷ $40.00) × 100 = 50.00% - Key takeaway: A 50% markup produces a 33.33% margin.
Example 2: Target Margin Pricing
A manufacturer produces a product for $18.00 and requires a strict 40% gross profit margin:
- Unit Cost: $18.00
- Target Margin: 40.00%
- Selling Price:
$18.00 ÷ (1 − 0.40) = $18.00 ÷ 0.60 = $30.00 - Profit:
$30.00 − $18.00 = $12.00 - Equivalent Markup:
($12.00 ÷ $18.00) × 100 = 66.67% - Key takeaway: A 40% margin requires a 66.67% markup on cost.
Margin vs. Markup Quick Reference Table
These are arithmetic examples of how markup converts to margin. They are not pricing recommendations:
| Markup % (On Cost) | Resulting Margin % (On Price) | Price Multiplier | $100 Cost Worked Example |
|---|---|---|---|
| 15% | 13.0% | 1.15× | Cost $100 → Price $115 → Profit $15 |
| 25% | 20.0% | 1.25× | Cost $100 → Price $125 → Profit $25 |
| 33.3% | 25.0% | 1.33× | Cost $100 → Price $133.33 → Profit $33.33 |
| 50% | 33.3% | 1.50× | Cost $100 → Price $150 → Profit $50 |
| 75% | 42.9% | 1.75× | Cost $100 → Price $175 → Profit $75 |
| 100% | 50.0% | 2.00× | Cost $100 → Price $200 → Profit $100 |
| 200% | 66.7% | 3.00× | Cost $100 → Price $300 → Profit $200 |
| 300% | 75.0% | 4.00× | Cost $100 → Price $400 → Profit $300 |
Assumptions & Edge-Case Limitations
- Gross Unit Margins Only: This calculation accounts exclusively for direct product cost and selling price. It does not deduct merchant credit card processing fees, inbound shipping, warehousing overhead, or sales tax unless you factor them into the cost.
- Zero denominators: Margin is N/A when selling price is zero; markup is N/A when cost is zero. With a positive cost, a 100% target margin cannot be reached at a finite positive selling price.
- Industry variance: A useful target depends on your complete cost structure, market, competition and pricing strategy. This calculator does not recommend a margin or markup.
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