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Profit margin calculator

Profit margin and markup calculator

Margin (on sale price) 40 %
Markup (on cost)
66,7 %
Profit per unit
40,00 €

Margin is calculated on the sale price; markup on the cost. They're different: a 67% markup equals a 40% margin.

This profit margin calculator works out your margin, markup and profit per unit from a product’s cost and sale price.

Margin vs markup

Margin is profit as a percentage of the sale price: profit ÷ price. Markup is profit as a percentage of the cost: profit ÷ cost. They answer different questions — “what share of each sale is profit?” versus “how much did I add on top of what it cost me?” — and confusing the two leads many sellers to under-price.

The formulas

Given a cost C and a sale price P, profit is P − C. Margin is profit ÷ P; markup is profit ÷ C. To go the other way, if you know your target margin m, the price you need is P = C ÷ (1 − m).

FAQ

What's the difference between margin and markup?
Margin is calculated on the sale price, markup on the cost. For the same product, markup is always higher than margin — a 67% markup equals a 40% margin, not the other way around.
How do I convert markup to margin?
Margin = markup / (1 + markup). For example, a 100% markup (doubling the cost) equals a 50% margin, because the profit is half of the sale price, not equal to the cost.
Which one should I use to set prices?
Either works, but you must be consistent. Retailers usually talk about margin (percentage of revenue), while some wholesalers price using markup (percentage of cost). Mixing them up is a common pricing mistake.