Profit margin & markup calculator
Know your cost and price? Get profit, margin and markup. Setting a price? Enter your cost and the margin or markup you want, and get the price to charge.
Margin
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- Selling price
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- Profit per sale
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- Margin
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- Markup
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- Deepest discount before a loss
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Running a sale? Check what a discount does to this profit.
Margin vs markup
Both start from the same profit: price − cost. They divide it by different things.
- Margin = profit ÷ price. “What share of each sale do I keep?”
- Markup = profit ÷ cost. “How much did I add on top of what I paid?”
A product that costs $60 and sells for $100 makes $40 profit: a 40% margin but a 66.7% markup. Mixing them up is the classic pricing mistake: a “50% markup” is only a 33.3% margin.
| Markup | Margin |
|---|---|
| 25% | 20% |
| 50% | 33.3% |
| 66.7% | 40% |
| 100% | 50% |
| 150% | 60% |
| 200% | 66.7% |
Formulas: margin = markup ÷ (100 + markup) × 100 and markup = margin ÷ (100 − margin) × 100.
Why your margin is your discount limit
Your margin is exactly how much you can take off the price before a sale loses money. With a 40% margin, a 40% discount sells at cost and anything deeper sells below it. That's why stores with thin margins get hurt most by broad discount codes. If you already ran discounts, the loss report shows which orders went below cost.
Questions
What is the difference between margin and markup?
Both use the same profit. Margin divides profit by the selling price; markup divides it by the cost. A product that costs $60 and sells for $100 has a 40% margin and a 66.7% markup.
How do I price a product for a 40% margin?
Divide the cost by (1 − 0.40). A product that costs $60 needs a price of $100 for a 40% margin.
Why does margin matter for discounts?
Your margin is the deepest discount you can give before a sale loses money. A 40% margin means anything above 40% off sells below cost.