Question 1

What's the difference between profit margin and markup?

Accepted Answer

Margin is profit divided by the selling price; markup is profit divided by the cost. Both describe the same profit amount, just as a percentage of different bases — that's why a 50% markup equals a 33.3% margin, not 50%.

Question 2

How do I calculate the selling price from the cost?

Accepted Answer

From a target margin, price is cost divided by (1 - margin/100) — with a $60 cost and a 40% margin, price is $100. From a target markup, price is cost multiplied by (1 + markup/100) — with a $60 cost and a 40% markup, price is $84.

Question 3

How do I find the real margin and markup of a price I already charge?

Accepted Answer

Enter the cost and your current selling price under 'My real margin and markup' — the calculator divides the profit (price minus cost) by the price to get the margin, and by the cost to get the markup, without doing the math by hand.

Question 4

What's considered a good profit margin?

Accepted Answer

It varies a lot by industry: retail typically runs 10% to 30%, while services and digital products — which carry less variable cost — can reach 60% or 80%. The right number also depends on your fixed costs and sales volume.

Profit Margin & Markup Calculator

How the calculator works, in practice

What each number means

Cost

Profit margin

Markup

Margin ≠ markup

Tips about margin and markup

Frequently asked questions about margin and markup

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