Money
Margin Calculator
Enter what an item costs you and what you sell it for.
The link carries your figures, so it reopens on exactly these numbers.
Margin against markup, per $100 of cost
The same trade, measured two ways. Read down the margin column to find the selling price you actually need — quoting a markup when you meant a margin is the expensive direction of this mistake.
| Sell at | Gross margin | Equivalent markup | Profit per unit |
|---|---|---|---|
| $125 | 20% | 25% | $25 |
| $133.33 | 25% | 33.33% | $33.33 |
| $142.86 | 30% | 42.86% | $42.86 |
| $166.67A 40% margin needs a 66.7% markup — not 40%. | 40% | 66.67% | $66.67 |
| $200Doubling the cost is a 50% margin. | 50% | 100% | $100 |
| $250 | 60% | 150% | $150 |
The formula
profit = price − cost
margin % = profit ÷ price × 100
markup % = profit ÷ cost × 100
Worked example
An item costing $60, sold at $100
- 100 − 60 = 40 profit
- 40 ÷ 100 = 40% margin
- 40 ÷ 60 = 66.7% markup
Where this goes wrong
Confusing margin with markup
Margin is profit as a share of the selling price; markup is profit as a share of the cost. Buy at $60 and sell at $100 and that is a 40% margin but a 67% markup — the same trade, two very different numbers. Pricing off the wrong one is how businesses quietly undercharge.
Questions
- What is the difference between margin and markup?
- Both describe the same profit, measured against different bases. Margin divides profit by the selling price; markup divides it by the cost. A 40% margin is a 66.7% markup — quoting one when you meant the other is a common and expensive mistake.
- What margin should I aim for?
- It depends entirely on the trade. Grocery retail runs on single-digit margins, software on 80% or more. Compare against your own sector, not a general rule.
- Is gross margin the same as profit?
- No. Gross margin only subtracts the direct cost of the goods. Rent, wages, marketing and tax come out afterwards, so a healthy gross margin can still leave no net profit.