Profit margin and markup calculator
See your real profit before you set a price. Buy at 80, sell at 100 and you keep 20: that is a 20% margin on the price, or a 25% markup on the cost. For a 30% margin on something that costs 70, sell it at 100.
Updated:
Margin
20%
Profit: 20.00
Markup (on cost)
25%
Worked out in your browser; nothing is sent.
The formulas
- Profit = selling price − cost
- Margin = profit ÷ selling price
- Markup = profit ÷ cost
- Price for a target margin = cost ÷ (1 − margin)
- Price for a target markup = cost × (1 + markup)
Cost 70, wanted margin 30%: 70 ÷ (1 − 0.30) = 70 ÷ 0.70 = 100 Profit 30; 30 ÷ 100 = 30% margin A 30% markup instead: 70 × 1.30 = 91 (only a 23% margin)
Margin or markup: why the difference matters
Shopkeepers often say "I add 30% to the cost": that is markup. Rent, wages and other costs, though, are paid out of sales, so they are planned against the margin. Adding 30% does not give a 30% margin: in the example it gives 23%.
Tax last
Work out the margin on prices without tax, then add the VAT or GST for the shelf price. Type the tax rate in the calculator to see the price with tax too. For India’s GST there is a GST calculator.
When supplier prices change
Type the new cost and keep the same target margin to get the new price. For the percentage of a price rise, use the discount and price increase calculator.
Put this calculator on your site
Copy the code into your page. The tool works for free, with a small Baki Fast link under it.
Questions
Can a margin be more than 100%?
No, the margin is a share of the selling price, and no more than all of it can be profit. Markup can be: buying at 50 and selling at 150 is a 200% markup.
What is a good margin for a small shop?
It depends on the trade: groceries run on thin margins, clothing and accessories on wider ones. Start with the margin that pays your monthly costs: break-even calculator.