Margin Calculator
Calculate gross margin, markup, and profit. Find selling price for target margin.
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What is a Margin Calculator?
A Margin Calculator helps businesses determine profit as a percentage of selling price (gross margin) or as a percentage of cost (markup). Understanding the difference between margin and markup is crucial for pricing products correctly.
Our calculator offers 4 calculation modes: find margin from cost and revenue, find selling price from target margin, find cost from revenue and margin, or calculate margin from markup percentage. Supports 6 currencies and quantity multipliers for bulk calculations.
Perfect for retailers, e-commerce, dropshippers, and any business that needs to price products for profitability.
4 Calculation Modes
Find margin, markup, selling price, or cost as needed.
Target Margin Pricing
Find exact selling price for your desired margin.
Visual Breakdown
See cost vs profit as a visual bar chart.
Multi-Currency
USD, GBP, EUR, AUD, CAD, INR supported.
Margin vs Markup Comparison
| Markup % | Margin % | Cost $100 → Sell | Profit |
|---|---|---|---|
| 15% | 13.04% | $115 | $15 |
| 25% | 20% | $125 | $25 |
| 50% | 33.33% | $150 | $50 |
| 100% | 50% | $200 | $100 |
| 200% | 66.67% | $300 | $200 |
Key Formulas
(Revenue - Cost) ÷ Revenue × 100
(Revenue - Cost) ÷ Cost × 100
Cost ÷ (1 - Margin/100)
Cost × (1 + Markup/100)
Industry Benchmarks
Pricing Strategy Tips
Track margin per product not just overall
Include all costs in COGS (shipping, packaging)
Calculate margin after discounts not before
Higher volume products can have lower margins
Review margins quarterly as costs change
Consider psychological pricing ($99 vs $100)
Common Pricing Mistakes
Confusing margin and markup (they're different!)
Not including all costs in COGS calculation
Offering discounts without checking margin impact
Using same margin for all products regardless of volume
Frequently Asked Questions
What is the difference between margin and markup?
Margin is profit as a percentage of selling price (revenue). Markup is profit as a percentage of cost. For the same profit, margin is always lower than markup. Example: Cost $80, Sell $100 = $20 profit. Margin = 20/100 = 20%. Markup = 20/80 = 25%.
How do I calculate selling price from target margin?
Use formula: Selling Price = Cost ÷ (1 - Margin/100). Example: Cost $80, Target margin 25%. Selling Price = 80 ÷ (1 - 0.25) = 80 ÷ 0.75 = $106.67. This gives you 25% margin on the selling price.
What is a good profit margin for retail?
Typical retail margins: Grocery: 1-3%. Clothing: 40-50%. Electronics: 15-25%. Jewelry: 50-70%. Restaurants: 3-9% net. E-commerce: 20-50%. Higher margins for unique or luxury products, lower for commodities with high competition.
How do I convert markup to margin?
Formula: Margin = Markup ÷ (100 + Markup) × 100. Example: 50% markup → Margin = 50 ÷ 150 × 100 = 33.33%. Quick conversions: 25% markup = 20% margin. 50% markup = 33.3% margin. 100% markup = 50% margin.
How do I convert margin to markup?
Formula: Markup = Margin ÷ (100 - Margin) × 100. Example: 25% margin → Markup = 25 ÷ 75 × 100 = 33.33%. Quick conversions: 20% margin = 25% markup. 33.3% margin = 50% markup. 50% margin = 100% markup.
What is gross margin vs net margin?
Gross Margin = (Revenue - COGS) / Revenue. Only considers direct product costs. Net Margin = (Revenue - All Expenses) / Revenue. Includes operating costs, taxes, interest. Gross margin is typically 30-50%, net margin 5-20% for healthy businesses.
Why is margin important for pricing?
Margin determines profitability and sustainability. Too low margin: Can't cover operating costs and grow. Too high margin: May lose customers to competitors. Right margin: Covers costs, funds growth, and remains competitive. Track margin by product to identify winners and losers.
How do I factor in shipping when calculating margin?
Include shipping in your cost calculation. Landed Cost = Product Cost + Shipping + Customs + Handling. Then calculate margin on the landed cost. If you charge shipping separately, only include inbound shipping in COGS, not outbound customer shipping.
What is keystone pricing?
Keystone pricing is doubling the cost to set selling price (100% markup = 50% margin). Example: Cost $50, Sell $100. Popular in retail for simplicity. May be too low for products with high handling costs, or too high for competitive markets.
How do discounts affect margin?
Discounts disproportionately affect margin. Example: 40% margin product with 20% discount → New margin = (80-60)/80 = 25%. You need to sell 60% more units to make the same profit. Always calculate margin AFTER discount, not before.