Margin Calculator
Calculate profit margin, markup, gross profit and selling price instantly. Determine the selling price needed to achieve your target profit margin using our free online margin calculator.
Calculation Mode
Choose whether you want to calculate your profit margin from an existing selling price or determine the selling price required to achieve your desired margin.
Results
Calculation Summary
Understanding the Results
Gross Profit
Gross profit is the amount remaining after subtracting the cost price from the selling price. It represents the profit earned before operating expenses, taxes and other business costs.
Profit Margin
Profit margin measures how much of every sale is retained as profit. A higher margin generally indicates a more profitable product or service.
Markup
Markup measures how much has been added to the original cost price when determining the selling price. Although related to profit margin, it is calculated differently and should not be confused with margin.
Required Selling Price
When using the desired margin mode, the calculator determines the minimum selling price required to achieve your chosen profit margin based on the cost price entered.
Pricing Best Practices
- Always calculate your selling price from your total product cost rather than purchase price alone.
- Include packaging, shipping, payment processing fees, commissions and other direct costs when determining your cost price.
- Profit margin and markup are different measurements and should not be used interchangeably.
- Review your pricing regularly as supplier costs and market conditions change.
- Compare different target margins before deciding on your final selling price.
- Small improvements in profit margin can have a significant impact on long-term business profitability.
Continue with These Tools
Finished using Margin Calculator? Here are some related tools that people commonly use next to complete their workflow faster.
Gross Profit Calculator
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Profit Calculator
Calculate your total profit, revenue and profit margin using our free online Profit Calculator.
Discount Calculator
Calculate discount amount, final price and savings instantly using our free online discount calculator.
VAT Calculator
Instantly add VAT, remove VAT or extract VAT from any amount using any VAT rate.
Break-even Calculator
Calculate the number of units you need to sell to break even using our free online break-even calculator.
ROI Calculator
Calculate return on investment (ROI), net profit and total return using our free online ROI calculator.
How to Calculate Profit Margin
Use this Margin Calculator to calculate gross profit, profit margin, markup and selling price. Whether you already know your selling price or you want to determine the correct selling price for a desired margin, this calculator provides accurate business pricing calculations in seconds.
Overview
Pricing products correctly is one of the most important decisions any business can make. Selling too cheaply reduces profitability, while pricing too high may reduce sales. This Margin Calculator helps retailers, wholesalers, manufacturers, online sellers and service providers calculate gross profit, markup and profit margin accurately. It can also calculate the selling price required to achieve a chosen profit margin, making it useful when setting prices for new products or reviewing existing pricing strategies.
Benefits
How It Works
Choose whether you want to calculate your profit margin from a known selling price or calculate the selling price required to achieve a desired profit margin.
Enter the product or service cost price.
If calculating margin, enter the selling price. If calculating selling price, enter your desired margin percentage.
The calculator determines the gross profit earned on the sale.
Profit margin is calculated as a percentage of the selling price.
Markup is calculated as a percentage of the original cost price.
When using the desired margin mode, the calculator determines the minimum selling price required to achieve that target margin.
All calculations update instantly, allowing you to compare different pricing strategies before making business decisions.
How to Use This Tool
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1Choose the calculation mode.
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2Enter the cost price of your product or service.
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3Enter either the selling price or the desired profit margin, depending on the selected mode.
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4Review the calculated selling price, gross profit, margin percentage and markup percentage.
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5Adjust your figures to compare different pricing scenarios.
Helpful Tips
- Cost price should include all direct costs associated with producing or purchasing the product.
- Margin and markup are different financial measurements and should not be used interchangeably.
- Higher margins generally result in higher profitability but may affect competitiveness.
- Always consider VAT, taxes, shipping costs and payment processing fees separately where applicable.
- Review your pricing regularly as supplier costs change over time.
- Small increases in margin can significantly improve long-term business profitability.
- Use the selling price mode when creating new price lists or quotations.
- Compare multiple pricing scenarios before deciding on your final selling price.
Common Uses
Calculate the profit margin on a retail product.
Determine the selling price required for a 40% profit margin.
Review wholesale pricing before sending quotations.
Calculate Amazon FBA product pricing.
Calculate eBay selling prices.
Price products for a Shopify store.
Review restaurant menu pricing.
Estimate service pricing for consultants and freelancers.
Worked Examples
The following examples demonstrate how this tool can be used in realistic scenarios.
Retail Product
A retailer purchases a product for £40 and sells it for £65. The calculator determines the gross profit, profit margin and markup, helping the retailer understand the profitability of each sale.
Desired 35% Margin
A business purchases stock for £120 and wants to achieve a 35% profit margin. Enter the cost price and desired margin to calculate the required selling price automatically.
Wholesale Pricing
A wholesaler compares several selling prices to determine which provides the best balance between competitiveness and profitability.
eCommerce Pricing
An online seller reviews multiple selling prices before listing a product on Amazon, eBay or Shopify to ensure the desired margin is achieved after costs.
Common Mistakes
Avoid these common mistakes to achieve the most accurate results.
- Confusing profit margin with markup. Margin is based on selling price, while markup is based on cost price.
- Entering the selling price where the cost price should be entered.
- Ignoring additional business costs such as VAT, shipping, packaging, payment processing fees or marketplace commissions.
- Setting prices based solely on competitors without understanding your own costs.
- Using markup when the business actually works with target profit margins.
- Not reviewing pricing when supplier costs increase.
- Assuming a higher markup always results in the same profit margin.
- Pricing products without considering discounts or promotional offers.
Glossary
Definitions of the most important terms used by this tool.
Cost Price
The total amount paid to purchase or produce a product before it is sold.
Selling Price
The amount charged to the customer for the product or service.
Gross Profit
The difference between the selling price and the cost price before deducting operating expenses.
Profit Margin
The percentage of the selling price that represents gross profit.
Markup
The percentage added to the cost price to determine the selling price.
Pricing Strategy
The method a business uses to determine how much to charge for its products or services.
Break-even Price
The minimum selling price required to recover the total cost without making a profit or loss.
Frequently Asked Questions
What is the difference between margin and markup?
Profit margin is calculated as a percentage of the selling price, while markup is calculated as a percentage of the cost price. Although they are related, they are not the same calculation.
Can this calculator determine my selling price?
Yes. Select the selling price calculation mode, enter your cost price and desired profit margin, and the calculator will determine the required selling price.
Does this calculator work with any currency?
Yes. The calculations are based on percentages, so the calculator works with any currency including USD, GBP, EUR, CAD, AUD, GHS and many others.
Who should use this calculator?
Retailers, wholesalers, manufacturers, online sellers, accountants, business owners, consultants, freelancers and anyone involved in pricing products or services can benefit from this calculator.
Is this suitable for online marketplaces?
Yes. It can be used when pricing products for platforms such as Amazon, eBay, Etsy, Shopify and other online marketplaces.
Why does increasing markup not produce the same margin?
Margin and markup use different formulas. A 50% markup does not produce a 50% profit margin because margin is calculated using the selling price rather than the cost price.
Things to Know
- Results are rounded to two decimal places.
- Calculations do not include VAT, sales tax, shipping costs, payment processing fees or marketplace commissions unless these costs are included in the cost price.
- This calculator works with any currency.
- Always review your pricing strategy regularly as supplier and operating costs change over time.
Disclaimer
This calculator provides estimates for educational, budgeting and business planning purposes.
Actual profitability depends on all business costs, taxes and operating expenses.
Always verify pricing decisions using your complete financial information before selling products or services.
Official References
The following official resources were used when developing this tool and are useful for further reading.