About this tool
A margin calculator shows how much of the selling price is profit.
Margin (%) = (price - cost) / price x 100, while markup (%) = (price - cost) / cost x 100. They use the same profit but a different base, so markup is always larger than margin.
For example, a product that costs 60 and sells for 100 makes 40 profit: the margin is 40% and the markup is 66.7%, and the cost ratio is 60%. What is the difference between margin and markup?
Margin compares profit to the selling price, markup compares profit to the cost, so a 50% markup is only a 33.3% margin. How do I price for a target margin?
Selling price = cost / (1 - target margin / 100): with a cost of 60 and a 40% target, the price is 100. Why not just add 40% to the cost? Because that gives 84, which is only a 28.6% margin.
Fill in all three fields: cost, current selling price and target margin; the first four results use cost and price, and the last one uses cost and target margin.
Taxes such as VAT, fees, shipping and other expenses are not included, so treat the result as gross margin on the numbers you enter. All calculation happens in your browser and nothing is sent anywhere.
How to use
- Enter your cost and your current selling price.
- Enter the target margin (%) you want to reach.
- Read the profit, margin, markup, cost ratio and the price needed for your target margin.