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Profit Margin Calculator

Enter what an item costs you and what you sell it for to get the profit, the gross margin and the markup — two percentages that are easy to mix up.
$
$
Profit margin
40%
Gross profit
$40.00
Markup
66.67%

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How to use it

  1. Enter your cost for the item (what you paid or what it costs to make).
  2. Enter the selling price.
  3. Read the profit, margin (profit as a share of price) and markup (profit as a share of cost).

Examples

Retail product

Buy for $60, sell for $100: profit is $40, the margin is 40% and the markup is 66.67%.

Same profit, different percentages

A 50% markup on a $20 cost gives a $30 price — but that's only a 33.33% margin. Mixing the two up is a common pricing mistake.

Margin versus markup

Margin compares profit with the selling price; markup compares it with cost. They describe the same profit, but markup is always the larger number.

Gross margin here only accounts for the item's direct cost. Rent, wages, shipping and payment fees reduce your net profit further.

margin = (price − cost) ÷ price · markup = (price − cost) ÷ cost

Frequently asked questions

How do I price for a target margin?

Divide cost by (1 − target margin). For a 40% margin on a $60 cost: 60 ÷ 0.6 = $100.

Can margin be more than 100%?

No. Margin approaches 100% as cost approaches zero, but can't exceed it. Markup has no upper limit.

What does a negative margin mean?

You're selling below cost and losing money on each sale.

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More in Money · Last reviewed October 2026