Free margin calculator. Calculate profit, margin, and markup from cost and price, or find the right selling price from a target margin.
A margin calculator finds your profit, profit margin percentage, and markup percentage from a product's cost and selling price, or works backward to find the price needed to hit a target profit margin.
71,43 €
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Margin Calculator
One of the most common pricing mistakes is confusing margin with markup, since both describe profitability but use different denominators. Margin divides profit by the selling price; markup divides profit by the cost. The same transaction produces two different percentages depending on which one you're calculating.
This distinction matters in practice: if you want a 40% profit margin and simply mark your cost up by 40%, you'll actually end up with a margin closer to 29%, undershooting your target. This calculator lets you work in either direction to avoid that mistake.
Working Backward from Margin
To hit a specific margin target, the correct formula is cost divided by (1 minus the margin as a decimal) — not cost multiplied by (1 plus the margin). This accounts for the fact that margin is calculated against the final selling price, not the cost.
For example, a $30 cost item priced for a 25% margin needs to sell for $30 ÷ 0.75 = $40, not $30 × 1.25 = $37.50 (which would only yield a 20% margin). Getting this formula right is the difference between hitting your actual profitability targets and consistently falling short.
Industry Context
Profit margin norms differ dramatically by industry because they reflect fundamentally different cost structures. Grocery stores and distributors often operate on thin single-digit margins because of high volume and low differentiation, while software, consulting, and luxury goods can sustain much higher margins due to lower marginal costs or stronger pricing power.
This means there's no single "healthy" margin percentage that applies everywhere — the right benchmark is always the typical margin for your specific industry and business model, not an arbitrary round number.
Practical Considerations
This calculator computes gross margin and markup based on a single cost figure, but doesn't distinguish between cost of goods sold and other operating expenses like overhead, marketing, or labor — all of which affect your actual net profitability beyond the simple cost-to-price relationship.
It also doesn't account for volume discounts, taxes, payment processing fees, or returns, all of which can meaningfully reduce your realized margin compared to the calculated figure based on list price and unit cost alone.
Practical Use Cases
Pricing a new product
Setting a selling price that achieves your target profit margin.
Checking existing product profitability
Finding the actual margin and markup on products you already sell.
Comparing suppliers or cost changes
Seeing how a change in your cost affects your margin at a fixed price.
Setting wholesale vs. retail pricing
Converting between markup-based wholesale pricing and margin-based retail targets.
Evaluating a business or product line
Comparing your margins against typical benchmarks for your industry.
Margin is profit as a percentage of the selling price (profit ÷ price), while markup is profit as a percentage of the cost (profit ÷ cost). For the same dollar profit, markup is always a higher percentage than margin — a $50 cost sold at $75 has a 33.3% margin but a 50% markup.
Divide the cost by (1 minus the target margin as a decimal). For example, to achieve a 30% margin on a $50 cost: $50 ÷ (1 − 0.30) = $71.43. This is different from simply adding 30% to the cost, which would only produce a 23% margin.
Margin is profit divided by price, and price always includes the cost plus profit. As markup increases toward infinity, margin approaches — but never reaches — 100%, since the cost always makes up some nonzero fraction of the selling price.
It varies enormously by industry — grocery retail often runs 1-3% net margin, while software and services businesses can see 70%+ gross margin. There's no universal "good" number; what matters is comparing your margin to typical margins in your specific industry.
Margin is generally more useful for pricing decisions since it directly tells you what percentage of revenue becomes profit, which is what most profitability targets and financial statements are based on. Markup is more common in retail and wholesale pricing conventions, where prices are often set as a multiple of cost.