Free tool
Profit margin calculator
Enter what an item costs and what you sell it for to see profit, margin and markup. Or set a target margin and get the price to charge.
- Free
- No account needed
- Margin and markup
Include everything it costs you to sell one unit (product, packaging, fees, shipping) for a margin close to what you actually keep.
Profit margin
0%
Profit margin formula
Profit margin = (price minus cost) divided by price, times 100. It tells you how much of every dollar you take in is profit. On a $40.00 sale of an item that cost $25.00, $15.00 is profit: a 37.5% margin.
To price for a margin, rearrange it: price = cost divided by (1 minus margin). A $25.00 cost at a 50% margin needs a $50.00 price. Adding 50% to cost gives $37.50, which is only a 33% margin.
Margin to markup conversion table
The markup needed for each margin, and the price for an item that costs $10.
| Margin | Markup on cost | Price for a $10 item |
|---|---|---|
| 10% | 11.11% | $11.11 |
| 20% | 25% | $12.50 |
| 25% | 33.33% | $13.33 |
| 30% | 42.86% | $14.29 |
| 40% | 66.67% | $16.67 |
| 50% | 100% | $20.00 |
| 60% | 150% | $25.00 |
| 70% | 233.33% | $33.33 |
Margin after marketplace and payment fees
The margin that matters is the one after the platform takes its share. Amazon's referral fee is 15% in most categories, eBay's final value fee 13.6%, Etsy's fees around 10% of an order, and card processing about 3%. A product with a 50% gross margin can end up near 20% once those, shipping and advertising are paid.
Work out your platform's cut with the FBA calculator, eBay, Etsy or Shopify fee calculators, then add it to your cost here.
Selling online from outside the US?
A US LLC lets you sell as a US business, get paid in dollars and use Stripe and Shopify Payments. Formation is $399 with all state fees included.
Frequently asked questions
How do I calculate profit margin?
Subtract cost from the selling price to get profit, then divide profit by the selling price and multiply by 100. An item that costs $25.00 and sells for $40.00 makes $15.00 profit, a 37.5% margin.
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 cost. The same $15.00 profit on a $25.00 item sold at $40.00 is a 37.5% margin and a 60% markup. Margin can never reach 100%; markup can be any size.
How do I price for a target margin?
Divide the cost by one minus the margin. For a 50% margin on a $25.00 cost: $25.00 / (1 - 0.50) = $50.00. Adding 50% to the cost instead gives a 33% margin, which is the most common pricing mistake.
What is a good profit margin for an online store?
It depends on what the margin includes. Gross margin (price minus product cost) for e-commerce brands is often 40% to 70%. Once marketplace fees, payment processing, shipping and advertising come out, a net margin of 10% to 20% is healthy for most small online businesses.
Is gross margin the same as profit margin?
Gross margin uses only the direct cost of the product. Net profit margin also subtracts operating costs: fees, advertising, software, salaries and tax. Put only product cost in this calculator for gross margin, or your full cost per unit for something closer to net margin.
More free tools
Markup Calculator
Price from cost and markup
Open toolBreak-Even Calculator
Units to cover your costs
Open toolROAS Calculator
Are your ads paying for themselves
Open toolAmazon FBA Calculator
Referral, FBA and plan fees per unit
Open toolShopify Fee Calculator
Plan, card and transaction fees
Open tool