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Profit Margin & Markup Calculator

Turn cost and price into margin and markup, or price a product for a target margin.

1. From cost and price

Cost per unit ($)

Selling price per unit ($)

Profit per unit–

Profit margin–

Markup–

2. Price for a target margin

Cost per unit ($)

Target profit margin (%)

Price to charge

–

Profit per unit–

Equivalent markup–

Margin vs. markup: what is the difference?

Margin and markup both describe profit, but they compare it to different numbers. Margin compares profit to the selling price: how much of every dollar a customer pays you keep. Markup compares profit to the cost: how much you added on top of what the item cost you. Because the price is always larger than the cost when you make a profit, the markup percentage is always higher than the margin percentage for the same product.

Mixing them up is one of the most common pricing mistakes. If you want a 50% margin and add a 50% markup instead, you end up with only a 33% margin.

The formulas

Profit = price − cost
Margin % = profit ÷ price × 100
Markup % = profit ÷ cost × 100
Price for a target margin = cost ÷ (1 − target margin)

Worked example

A product costs you $12 to make and you sell it for $20. Your profit is $8. The margin is $8 ÷ $20 = 40%, and the markup is $8 ÷ $12 = 66.7%. If you want a 40% margin on a product that costs $12, the price is $12 ÷ 0.60 = $20.

Quick reference: margin to markup

Margin	Markup
20%	25%
25%	33.3%
33.3%	50%
40%	66.7%
50%	100%
60%	150%

Frequently asked questions

What should I include in "cost"?

Include everything it takes to deliver one unit: materials, packaging, shipping you pay, and per-sale platform or payment fees. Leaving out fees makes your margin look better than it really is.

What is a good profit margin?

It depends on the industry. Handmade and digital products often aim for high margins, while resale businesses usually work with thinner ones. Compare against similar sellers rather than a single rule.

Can margin be more than 100%?

No. Margin is a share of the price, so it can approach but never reach 100%. Markup, on the other hand, can be any size, such as 200% or 300%.

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