Profit margin calculator
Work out the profit, margin and markup on a product from its price and cost — or the price you need for the margin you want.
What the customer pays for one item, before delivery.
What one item costs you: product, packaging and payment fees.
- Profit
- 20.00
- Margin
- 40%
- Markup
- 66.7%
Price for a 40% margin: 50.00
Margin is profit as a share of the selling price; markup is profit as a share of the cost. The same product has a smaller margin than markup: an item that costs 30 and sells for 50 makes 20 profit — a 40% margin and a 67% markup.
How it is worked out
- Profit = price − cost
- Margin = profit ÷ price
- Markup = profit ÷ cost
- Price for a target margin = cost ÷ (1 − margin). For a 40% margin on a cost of 30: 30 ÷ 0.6 = 50.
What to count as cost
Include everything one sale costs you: the product, packaging, the payment provider's fee and, if you offer free delivery, the delivery. Leave out costs that do not change with each sale, such as your monthly subscription — cover those from the total profit of the month.
Margin or markup?
Use margin to compare products and to plan discounts: a 20% discount on a product with a 40% margin halves your profit per sale. Use markup when you set prices from cost — but remember that a 100% markup is only a 50% margin.
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