Margin, markup, pricing.
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Know exactly what you earn on every sale. Calculate profit margin, markup, or the selling price you need for a target margin — in seconds. Free, no signup, any currency.
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Margin vs markup — the difference that costs money
Margin is profit as a share of the selling price: (price − cost) ÷ price. Markup is profit as a share of the cost: (price − cost) ÷ cost. A product bought for $60 and sold for $100 has a 40% margin but a 66.7% markup. Confusing the two is one of the most expensive mistakes in small business pricing.
How to price for a target margin
Decide the margin you need first, then work backwards: price = cost ÷ (1 − margin). With a $60 cost and a 40% margin target, the price must be $60 ÷ 0.60 = $100. Use the "Price from margin" tab above — it does this instantly.
What margin should you aim for?
- Retail: typically 20–40% gross margin.
- Restaurants: 60–70% margin on food items is common.
- Digital products & software: 80%+ margins are normal.
Benchmark against your own industry and competitors — and always price from margin, not markup, so your numbers match your accounting.
Profit margin, explained
What is the difference between margin and markup?
Margin is profit as a percentage of the SELLING price: (price − cost) ÷ price. Markup is profit as a percentage of the COST: (price − cost) ÷ cost. A 25% markup on cost equals a 20% margin on price — they are never the same number.
How do I calculate selling price from a target margin?
Use the formula price = cost ÷ (1 − margin). For example, a $60 cost with a 40% margin needs a selling price of $60 ÷ 0.60 = $100. Switch to the 'price from margin' mode above and it does the math for you.
What is a good profit margin?
It depends on the industry. Retail often runs 20–40% gross margin, restaurants 60–70% on food, and software 80%+. Compare against your own costs and competitors rather than a single magic number.
Is this profit margin calculator free?
Yes. It is 100% free with no signup and works in any country with any currency.
Why is margin always lower than markup on the same sale?
Because the same profit dollars are divided by a bigger number. Margin divides by the selling price, markup by the smaller cost — so for any profitable sale, margin < markup. A 50% markup equals only a 33.3% margin.
How do I find my break-even price?
Break-even is price = total cost (margin 0%). The trap is forgetting hidden costs — add shipping, platform fees, and packaging to the product cost first, then break even against that full figure, not just the wholesale price.
Do discounts hurt margin more than they look?
Yes — disproportionately. Take a $60 item costing $40 (33.3% margin). A 20% discount drops the price to $48, and margin collapses to (48−40) ÷ 48 = 16.7%: you gave away 20% of revenue but half your margin.