Pricing & profitability
Margin & Markup Calculator
Calculate gross profit, profit margin, markup and the selling price needed to reach a target margin. Free and without sign-up.
Your numbers
Edit the example values to see your results.
Your results
Based on the values entered.
- Gross profit
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- Profit margin
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- Markup
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- Price for target margin
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- Price for target markup
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Rounded up to the nearest cent so the displayed price meets your target, before excluded expenses.
Rounded up to the nearest cent to avoid undershooting your target markup.
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How to use this calculator
Enter your cost and selling price. The calculator finds the difference as gross profit, then expresses it as a percentage of revenue (margin) and cost (markup). You can set either a target margin or a target markup to see the suggested selling price for each approach.
Example: If an item costs $70 and sells for $100, your gross profit is $30. The margin is 30%, whereas the markup is approximately 42.86%. A margin of 30% is not the same thing as a markup of 30%.
Margin vs. markup: a practical comparison
Margin and markup describe the same dollar profit from different perspectives. A $30 profit is a 30% margin on a $100 sale, but it is a 42.86% markup on a $70 cost. Confusing them can make your selling price lower than planned.
| Metric | Formula | Example |
|---|---|---|
| Gross profit | Price − Cost | $30 |
| Profit margin | Profit ÷ Price × 100 | 30% |
| Markup | Profit ÷ Cost × 100 | 42.86% |
How do you calculate a price from a target margin?
Divide your product cost by one minus your target margin expressed as a decimal. For a $60 item and a 40% target margin, the price is $60 ÷ (1 − 0.40) = $100. Margins of 100% or greater cannot be reached with a positive cost and a finite selling price.
How do you calculate a price from a target markup?
Multiply cost by one plus the markup rate expressed as a decimal. With $60 cost and 40% markup, the selling price is $60 × 1.40 = $84. That is not a 40% profit margin: the margin is approximately 28.57%.
Common pricing mistakes
Remember to account for shipping, transaction fees, packaging, returns and other direct costs when you estimate profitability. A positive gross margin does not necessarily mean the whole business is profitable, because overhead and taxes still need to be considered. This calculator requires a positive cost to define markup; a zero-cost item needs a different interpretation.
What's the difference between margin and markup?
Margin (%) = (Selling price − Cost) ÷ Selling price × 100
Profit margin compares profit with your selling price. Markup compares that same profit with your original cost. For example, a product costing $70 and selling for $100 has $30 gross profit, 30% profit margin, and approximately 42.86% markup. These measures are not interchangeable. The estimates exclude taxes, fees, returns and other operating expenses unless you include them in your cost.