Profit Margin Calculator
Profit margin is profit divided by selling price; markup is the same profit divided by cost, so markup is always the bigger number. Enter any two of cost, price, margin or markup and this calculator solves the rest, including the price to charge for a target margin.
Your numbers
Enter any two values and the rest solve instantly.
A 40% margin is a 66.7% markup: same profit, measured against price vs cost.
Free · no sign-up · margin and markup, solved either way.
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How profit margin works
The three formulas behind every result
Everything here comes from three lines. Profit is your selling price minus your cost. Margin is that profit divided by the selling price; markup is the same profit divided by the cost, so the two are never equal. The calculator solves whichever box you leave blank, and it runs the math backward to a price. It is the same thing you would type into a spreadsheet: margin is (price minus cost) divided by price.
Margin vs markup, the mistake that costs real money
Margin and markup measure the same profit against two different bases, so they are never the same number. Markup divides profit by the cost; margin divides it by the larger selling price, which makes markup the bigger percentage every time. On a $60 item sold for $100, the $40 profit is a 40% margin but a 66.7% markup. Mark an item up 40% and you have a 28.6% margin, not a 40% one, and a seller who confuses the two prices the next batch too low. Use the calculator above as a markup calculator too: enter cost and markup, or any two fields, and it returns the rest.
Gross, net, and operating margin
Gross margin is your selling price minus the cost of goods, which is the headline number here. Net margin takes out everything else a sale costs you: the marketplace fee, payment processing, shipping, packaging, ad spend, and the orders that come back. Operating margin sits in between for a running business, after overhead like rent and software. For a reseller the gap that matters is gross to net, because a healthy gross margin can shrink to a thin net once a platform takes its cut.
How to find your selling price from a target margin
This is the question most sellers actually have: I know my cost and the margin I want, so what do I charge? The formula is price equals cost divided by one minus the margin. A $45 item at a 40% target margin needs to sell for $75. Enter your cost and the margin you are aiming for and the price appears, with the matching markup next to it.
What counts as a good profit margin
There is no single benchmark, because it depends on what you sell and where. Resale flips often post high gross margins on thin nets after fees, while new retail goods run lower gross on cleaner nets, and published industry averages swing widely from one category to the next. Chasing one number is a trap. Price for the net margin you need after your real costs: a floor that still clears your time and your return rate, not just your cost of goods.
Why gross margin lies once a marketplace takes its cut
The headline margin here is gross, and your real take-home is lower. A $20 thrift item sold for $120 looks like an 83% gross margin, but after a 20% Poshmark fee and a 5% returns allowance it is closer to 58% net. Switch on the true-net panel, pick where you sell, and the calculator subtracts the real platform fee so you can see the gap between what a listing looks like it earns and what lands in your account. Use the matching fee calculator for the exact number on each platform.
Margin to markup conversion
The same profit, two bases, so the numbers never match. A 40% margin is a 66.7% markup. Here are the common ones; the calculator converts any value instantly.
| Profit margin | Equivalent markup |
|---|---|
| 10% | 11.1% |
| 15% | 17.6% |
| 20% | 25% |
| 25% | 33.3% |
| 30% | 42.9% |
| 40% | 66.7% |
| 50% | 100% |
| 60% | 150% |
Markup = margin / (1 - margin). Markup is always the larger number.
Worked examples
Cost $60, sold for $100
Profit is $40. That is a 40% margin on the $100 price, and a 66.7% markup on the $60 cost. Same forty dollars, two different percentages. This is the example to remember when margin and markup get mixed up.
Cost $45, target 40% margin
Work backwards: price = $45 / (1 − 0.40) = $75. At $75 you make $30 profit, a 40% margin and a 66.7% markup. This is the find-my-price mode, the move most calculators bury.
$20 thrift flip, sold $120
Gross margin is 83%. But sold on Poshmark, the 20% fee is $24 and a 5% returns allowance is $6, so net profit is $70 and net margin is 58%. The gross number overstates what you actually keep by 25 points.
Profit margin calculator FAQ
How do I calculate profit margin?
Profit margin is your profit divided by the selling price, shown as a percentage. Subtract cost from selling price to get profit, divide by the selling price, and multiply by 100. On a $100 sale that cost you $60, the profit is $40 and the margin is 40%. Enter any two values above and the calculator does it for you.
What is the difference between margin and markup?
They use the same profit but a different base. Margin divides profit by the selling price; markup divides the same profit by the cost. Because cost is the smaller number, markup is always the larger percentage. A 40% margin is a 66.7% markup. Confusing the two is the most common pricing mistake.
How do I find the selling price for a target margin?
Divide your cost by one minus the target margin. For a 40% margin on a $45 item, that is $45 / 0.60 = $75. The calculator has this built in: enter your cost and the margin you want, and the selling price appears. This is the reverse mode sellers need most.
What is a 20%, 30% or 40% margin?
A 20% margin means 20 cents of every dollar you charge is profit; on a $50 sale that is $10. A 30% margin on $50 is $15, and a 40% margin is $20. In markup terms, 20% margin is a 25% markup, 30% margin is a 42.9% markup, and 40% margin is a 66.7% markup.
How do I convert markup to margin?
Divide the markup by one plus the markup. A 50% markup is 0.50 / 1.50 = 33.3% margin. To go the other way, divide the margin by one minus the margin: a 40% margin is 0.40 / 0.60 = 66.7% markup. The calculator shows both at once so you never have to convert by hand.
Why is markup always bigger than margin?
Because markup measures the profit against the cost, which is smaller than the selling price that margin measures against. Dividing the same profit by a smaller number gives a bigger percentage. For any profitable sale, the markup percentage will exceed the margin percentage.
What is gross margin vs net margin?
Gross margin is selling price minus only the cost of goods. Net margin subtracts everything else it takes to make the sale: marketplace fees, payment processing, shipping, packaging, ad spend and returns. For a reseller the net is often roughly half the gross, which is why the true-net panel here matters more than the headline number.
How do marketplace fees change my real margin?
A lot. eBay takes about 13.6%, Poshmark 20%, Mercari 10%, Etsy around 11%. On an $80 gross-profit sale, a 20% platform fee on a $100 price is $20, turning a healthy gross margin into a much thinner net. Switch on the true-net panel, pick your platform, and use the dedicated fee calculator for the exact figure.
What is a good profit margin?
There is no universal number; it depends on your category and your costs. Resale flips often run high gross margins but thin nets after marketplace fees, while new retail goods run lower gross on cleaner nets, and published industry averages swing widely from one sector to the next. Aim for a net margin that covers your fees, your time and your return rate, not a figure you read somewhere. The true-net panel shows that number for your own sale.
What is contribution margin?
Contribution margin is what is left from the selling price after the variable costs of that one sale: for a reseller, the item cost, the platform fee, payment processing and shipping. It tells you how much each sale puts toward your fixed costs and profit, which is close to the net figure the true-net panel produces here.
How do I calculate margin in Excel or Google Sheets?
Put your cost in one cell and your price in another. Margin is (price minus cost) divided by price, formatted as a percentage; markup is (price minus cost) divided by cost. This calculator runs the same math without the formula, and it also works backward to give you the price for a target margin, which a single spreadsheet cell cannot do.
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