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Margin Calculator (Profit, Markup, Pricing)

Profit margin, markup, and selling price for any product. Four modes including markup-to-margin conversion and cost ceiling from target margin.

FINANCE

Profit margin, markup, and selling price for any product or service. Four modes: price from cost+target margin, margin from cost+price, max cost from price+target margin, and markup-to-margin conversion. Built for retailers, freelancers, and ecommerce sellers.

Margin and markup are not the same. Margin = (price - cost) / price (% of selling price). Markup = (price - cost) / cost (% above cost). A 50% markup is a 33.33% margin; a 100% markup is a 50% margin. To target margin M%, price = cost / (1 - M/100). The "max cost from price" mode is useful when you know the market price and want to know how much you can pay your supplier without sacrificing margin.

Disclaimer: Excludes sales tax, shipping, payment processing fees, and platform commissions. Subtract those from your effective revenue before computing margin for accurate decisions.

Frequently Asked Questions

What is the difference between margin and markup?
Margin is profit divided by the selling price. Markup is profit divided by the cost. They feel similar but produce different numbers from the same trade. A product that costs $50 and sells for $100 has a 50% margin (50/100) but a 100% markup (50/50). The calculator computes both and shows them side by side so you can see the relationship at a glance.
My supplier quotes me a markup, but my retail target is a margin. How do I convert?
Use the "Markup to Margin" mode. The formula is margin = markup / (1 + markup). A 50% markup is a 33.3% margin; a 100% markup is a 50% margin; a 200% markup is a 66.7% margin. The math: if cost is C and markup is M%, price = C times (1 + M/100), and margin = (price - C) / price = M / (M + 100).
What is a healthy profit margin for my product?
It depends entirely on industry. Grocery is 1-3%, fashion retail is 50-60%, SaaS is 70-80% gross margin. Benchmarks for ecommerce: 40-50% gross margin is healthy for most physical goods; below 30% you are too dependent on volume; above 70% you have a brand premium or a digital product. Subtract ad costs, payment fees, and shipping to get the net margin, which is what actually matters.
My ad platform takes a cut. Should I include that in my cost?
Yes, but treat it as a separate variable expense, not cost-of-goods. Cost of goods is the unit cost of the physical product. Variable expenses include payment processor fees (2.9% + $0.30), platform commissions (Amazon 15%, Shopify 2.4%), and your blended CAC. Subtract all of those from the selling price first; what is left is your contribution margin, which is what you live or die on.

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