How to use this calculator
- Enter your cost per unit: what you pay for the product.
- Enter your selling price, excluding VAT or sales tax.
- Optionally enter a target margin to see the price and markup you would need to reach it.
Margin and markup formulas
Gross profit = Price − CostMargin = Gross profit ÷ PriceMarkup = Gross profit ÷ CostPrice for a target margin = Cost ÷ (1 − Target margin)
Worked example
A product costs $30 and sells for $50.
- Gross profit: $50 − $30 = $20
- Margin: $20 ÷ $50 = 40%
- Markup: $20 ÷ $30 ≈ 66.7%
- Price for a 50% margin: $30 ÷ (1 − 0.50) = $60
Margin vs markup
Margin and markup describe the same profit from two sides, and mixing them up is one of the most common pricing mistakes. Adding a 40% markup to a $30 cost gives a $42 price, but the margin on that price is only $12 ÷ $42 ≈ 28.6%, not 40%.
| Markup | Margin |
|---|---|
| 25% | 20.0% |
| 50% | 33.3% |
| 100% | 50.0% |
| 150% | 60.0% |
| 200% | 66.7% |
Gross margin is not the whole story
This calculator gives gross margin: price minus product cost. Every order also carries shipping, payment fees, marketplace fees and returns, and ads come on top of that. To see how much margin is left for advertising, and the ROAS you need to stay profitable, use the break-even ROAS calculator, or the break-even CPA calculator for a per-order limit.
Frequently asked questions
What is profit margin?
Profit margin is the share of the selling price you keep as profit. A 40% margin means $40 of profit on every $100 of sales.
How do you calculate profit margin?
Profit margin = (selling price − cost) ÷ selling price × 100. A product that costs $30 and sells for $50 has a $20 profit and a 40% margin.
What is the difference between margin and markup?
Both use the same profit, but margin divides it by the selling price while markup divides it by the cost. The $30 product sold for $50 has a 40% margin but a 66.7% markup, so the two numbers are never interchangeable.
How do I calculate a selling price from a target margin?
Selling price = cost ÷ (1 − target margin), with the margin as a decimal. To make a 50% margin on a $30 product, sell it for $30 ÷ 0.5 = $60.
How do I convert markup to margin?
Margin = markup ÷ (1 + markup), and markup = margin ÷ (1 − margin), all as decimals. A 100% markup is a 50% margin; a 25% markup is a 20% margin.
What is a good profit margin?
It depends on your business model, category and costs, so there is no single good number. What matters is whether the margin leaves enough to pay for shipping, fees, advertising and overhead. The break-even ROAS calculator shows how your margin translates into the ad performance you need.
Is this gross margin or net margin?
This calculator gives gross margin: selling price minus the cost of the product. Net margin also subtracts every other cost, including shipping, fees, advertising and overhead, so it is always lower.
By the SellerUtils team · Last updated October 1, 2026. Results are estimates for planning and are not financial advice.