Profit Margin & Markup Calculator
Enter what an item costs you and what you sell it for. You'll get gross profit per unit, your profit margin (profit as a share of price) and your markup (profit as a share of cost) — the two numbers people constantly mix up.
Example: with Item cost $60 · Selling price $100 · Quantity 1 units · Industry (for benchmark) General / not sure → Gross profit / unit: $40.00.
- Profit margin40.0%
- Markup66.7%
- Total profit$40.00
Computed by the calculator below using its default values. Change any input to see your own numbers.
Price = cost + profit
How you compare
Margin vs. markup
Margin and markup describe the same profit from two angles. A $40 profit on a $100 sale is a 40% margin but a 66.7% markup on a $60 cost. Pricing off markup feels bigger; what hits your bank account is margin.
| Markup | Equivalent margin |
|---|---|
| 10% | 9.1% |
| 20% | 16.7% |
| 25% | 20.0% |
| 33.3% | 25.0% |
| 50% | 33.3% |
| 100% | 50.0% |
| 150% | 60.0% |
| 200% | 66.7% |
A 50% markup is only a 33.3% margin, not 50% — markup and margin only match at 0%. Your current numbers, if calculable, are highlighted above.
How it’s calculated
Gross profit = price − cost. Margin = profit ÷ price; markup = profit ÷ cost.
Use What do you know? to solve from any two of cost, price, margin %, or markup %: with Cost + Margin %, price = cost ÷ (1 − margin); with Cost + Markup %, price = cost × (1 + markup); with Price + Margin %, cost = price × (1 − margin). Every mode then derives gross profit, margin, markup, and total profit the same way as the default Cost + Price mode, so switching modes never changes the underlying formulas — only which two numbers you supply.
Results update as you type and are estimates, not professional advice — verify important decisions with a qualified professional.
Common mistakes
- Confusing margin (share of price) with markup (share of cost).
- Forgetting platform fees, returns, and overhead, which are not in gross margin.
Frequently asked questions
What's a good profit margin?
It varies by industry — retail often runs 5–15%, software far higher. Compare against peers in your niche rather than a universal target.
How do I convert markup to margin?
Margin = markup / (1 + markup). A 50% markup equals a 33.3% margin.
Does this include taxes or fees?
No — this is gross margin before taxes, platform fees, and overhead. Use our marketplace fee calculator for selling-platform costs.
Can I solve for cost or price instead of margin?
Yes — use the “What do you know?” selector above the inputs to switch to Cost + Margin %, Cost + Markup %, or Price + Margin %, and the calculator solves for the selling price or cost instead of assuming you already have both.