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Margin Calculator
About the Margin Calculator
Calculate profit margin and markup from your cost and selling price.
How to use the Margin Calculator
- Enter the Cost to Produce and the Sales Revenue / Price.
- Press Calculate Returns to see profit, margin and markup.
Formula and method
Profit = Price − Cost, Margin = Profit ÷ Price × 100, Markup = Profit ÷ Cost × 100.
Worked example
A product that costs $60 and sells for $100 earns $40: a 40% margin and a 66.7% markup.
When to use the Margin Calculator
- Finding the price needed to reach a target gross margin.
- Understanding how much of each sale is profit.
- Comparing product lines by margin.
Common mistakes to avoid
- Using cost as the base for margin. Margin is always calculated on the selling price.
- Forgetting that discounts reduce margin faster than they seem to.
Tips
- Margin can never reach 100%, but markup can exceed it.
- Include all costs in the cost figure.
Frequently Asked Questions
It depends on the industry. Retail margins are often much lower than software or services.
Divide the cost by (1 − 0.30). A cost of 70 gives a price of 100.
No. Margin is based on the selling price, so it cannot exceed 100%. Markup can be above 100%.