Formula & assumptions
Margin divides profit by selling price, while markup divides the same profit by cost. A 40% margin is therefore not a 40% markup. Enter all costs you want included in this gross calculation. The tool supports a below-cost selling price and shows negative profit. The target mode rearranges the margin formula; a margin of 100% cannot be achieved with a positive cost.
Worked example
A cost of 60 and selling price of 100 give profit 40, margin 40% and markup 66.67%. Pricing at a 40% markup would instead give a price of 84.
How to use this calculator
- Choose an existing-price analysis or target-margin calculation.
- Enter cost and either selling price or desired margin.
- Review profit, margin and markup together; account for excluded fees separately.
Frequently asked questions
Should I include shipping and packaging?
Include them in cost when you want this result to account for them. The calculator does not add them automatically.
Does margin equal net profit?
No. Overheads, percentage selling fees and tax can reduce net profit beyond the entered costs.
Why is a 100% target margin rejected?
With a positive cost, the target-price formula would divide by zero.