How the calculator works
Margin and markup both describe profit, but they measure it against different things. Margin compares profit to the selling price. Markup compares profit to what the product cost you.
For example, a product costs 60 and sells for 100. Profit is 40. Margin is 40 ÷ 100 = 40%. Markup is 40 ÷ 60 = 66.7%.
Margin to markup conversion
A common mistake is to add the margin percentage on top of cost. A 40% markup gives only a 28.6% margin. Use this table to see the equivalent figures.
| Margin | Equivalent markup |
|---|---|
| 10% | 11.1% |
| 20% | 25.0% |
| 30% | 42.9% |
| 40% | 66.7% |
| 50% | 100.0% |
| 60% | 150.0% |
Frequently asked questions
What is the difference between margin and markup?
Margin is profit as a share of the selling price. Markup is profit as a share of the cost. For the same sale, markup is always the larger number, so a 50% margin equals a 100% markup.
How do I calculate the selling price from a target margin?
Divide the cost by one minus the margin as a decimal. With a cost of 60 and a 40% margin, the price is 60 ÷ (1 − 0.40) = 100. The second mode in the calculator does this for you.
What is a good profit margin for an online store?
It depends on the category. Many ecommerce sellers aim for a gross margin of 40 to 60 percent before ad spend, shipping and platform fees. Low-ticket and marketplace products often run lower, so check your numbers after fees as well as before.
Does this include fees, shipping or ad costs?
No. Add those costs into the cost per unit to see your net result. Everything runs in your browser, and nothing you type is sent or stored.