Enter your cost and selling price to see your profit, profit margin and markup instantly. Need a price instead? Open “Find the price for a target margin” and enter the margin you want.
Find the price for a target margin
How to calculate profit margin
- Profit = selling price − cost
- Profit margin = profit ÷ selling price × 100
- Markup = profit ÷ cost × 100
- Price for a target margin = cost ÷ (1 − margin)
Example: an item costs $20 and sells for $50. Profit is $30, the margin is 60% and the markup is 150%. To hit a 40% margin on a $20 cost, you need a price of $20 ÷ 0.6 = $33.33.
Margin vs markup at a glance
| Margin | Same as markup of |
|---|---|
| 20% | 25% |
| 25% | 33.3% |
| 33.3% | 50% |
| 50% | 100% |
| 60% | 150% |
The most common pricing mistake is adding a 30% markup and thinking you have a 30% margin – you actually have 23%. Always price from the margin you need.
What cost should I include?
For a true product margin, include everything it takes to make or buy one unit: the product, packaging, inbound shipping and labour. Platform and payment fees are covered in our Etsy, eBay and Shopify fee calculators.
Frequently asked questions
What is a good profit margin?
It depends on the industry. Many online product sellers aim for a gross margin of 40–60% so there is room left for fees, advertising and returns.
Can margin be more than 100%?
No. Margin is a share of the selling price, so it is always below 100%. Markup, which is based on cost, can be any size.