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How to use
Calculate money profit, profit margin on selling price and markup on cost side by side, because margin and markup are often confused in pricing. You can also enter an optional target margin to see the selling price required to reach it.
- Enter the unit or service cost.
- Enter the current selling price if you know it, or leave it blank when you only want a target-margin price.
- Optionally enter a target margin below 100%, then calculate the requested results.
How it is calculated
Example
Example: cost 100 and selling price 150 gives 50 profit, a 33.33% margin on selling price and a 50% markup on cost. For a 40% target margin on the same cost, the required selling price is 100 ÷ 0.60 = 166.67.
Important notes
This is a simplified gross-profit pricing tool, not an income statement. Include any costs you want reflected in the cost input, such as shipping, payment fees or packaging where relevant. Taxes and operating expenses are not added automatically, and the tool is not accounting or financial advice.
Worked examples and interpreting results
Cost 80 and sale price 100 mean profit 20 and margin 20%. Markup is 25%; the percentages differ because their denominators differ.
| Case | Calculation | Result |
|---|---|---|
| Profit margin | (100 − 80) ÷ 100 × 100 | 20 % |
| Markup on cost | (100 − 80) ÷ 80 × 100 | 25 % |
How to check the result
Define the cost basis and include relevant expenses if you want a margin after those expenses. Shipping and payment fees are not inferred automatically.
Frequently asked questions
What is the difference between margin and markup?
Margin divides profit by selling price, while markup divides profit by cost, so the percentages differ for the same transaction.
How do I price for a target margin?
Selling price = cost ÷ (1 − target margin as a decimal). Simply adding the same percentage to cost does not produce the same margin.
Can the margin be negative?
Yes. If selling price is below cost, profit and margin become negative, indicating a loss on the entered figures.