Profit Margin Calculator

Margin and markup get used like they're the same word. They aren't, and the confusion costs sellers real money when they set prices based on the wrong one.

This calculator shows both, side by side, and tells you the price you'd need to hit a margin target.

Margin vs markup, in plain terms

• Margin = profit ÷ sale price. This is what's left after the sale, as a share of what the customer paid.
• Markup = profit ÷ cost. This is how much you added on top of what you paid.

A 100% markup (you doubled your cost) is only a 50% margin. A 50% markup is a 33% margin. The gap widens as the markup grows, which is exactly why "just add 50%" is a lazy way to price and often leaves you thin.

Which one to run your business on

Margin. Always margin for pricing decisions, because it reflects what the customer pays and what you keep. Markup is fine for quick supplier math ("I'll triple the cost"), but the moment you're deciding whether a product is worth keeping, you want margin — profit as a share of revenue.

The target price

Type the margin you want and the calculator flips it: what price gets you there, given your cost. If that price is above what the market will bear, the product doesn't work at your cost — and that's useful information before you order, not after.

A note on "good" margins: it depends on your model. Retail-arbitrage flippers live on thin, fast margins. Private label wants 20–35% net to absorb the surprises. The calculator doesn't judge the number — it just makes sure you're looking at the right one.