Profit margin and markup
Enter your cost and selling price to see the profit, margin and markup, or enter a cost and a target margin to get the price to charge.
- Margin, markup, price
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How to use it
- Pick what to work out.
- Enter the cost, the price, or the margin or markup you want.
- Read the profit, margin, markup and price, and the total for the units sold.
Margin and markup
Margin is profit as a share of the selling price, and markup is profit as a share of the cost. A product that costs 60 and sells for 100 has a profit of 40, a margin of 40% and a markup of 66.7%. The two are linked: margin = markup ÷ (1 + markup).
To hit a target margin, divide the cost by (1 − margin); a 40% margin on a cost of 60 needs a price of 100. To apply a markup, multiply the cost by (1 + markup). Add the units sold to see the total revenue and profit.
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Questions
What is the difference between margin and markup?
Margin divides profit by the selling price; markup divides it by the cost. The same sale always has a lower margin than markup.
What price gives a 30% margin?
Divide the cost by 0.7. A cost of 70 needs a price of 100 for a 30% margin.
Should I include tax in the price?
Use prices before sales tax or GST, since the tax is collected for the government. Use the sales tax calculator to add it afterwards.
What is a good profit margin?
It varies by industry: grocery shops often work on a few percent, while software and services can exceed 50%.