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Profit Margin Calculator

Get profit, margin and markup from your cost and selling price, or work backwards to the price that gives the margin you want.

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Margin and markup are not the same

Both describe the same profit, measured against different numbers. Margin is profit as a share of the selling price. Markup is profit as a share of the cost. Mixing them up is one of the most common pricing errors, and it always errs in the same direction: you earn less than you think.

Profit = Selling price − Cost

Margin = Profit ÷ Selling price × 100

Markup = Profit ÷ Cost × 100

Example

Cost
$45
Selling price
$75
Profit = 75 − 45
$30
Margin = 30 ÷ 75
40%
Markup = 30 ÷ 45
66.7%

Pricing for a target margin

To hit a margin, divide the cost by one minus the margin. Adding the margin percentage to the cost does not work:

Price = Cost ÷ (1 − Target margin)

Markup on costResulting margin
25%20%
50%33.3%
100%50%
200%66.7%
300%75%

Margin and advertising

Your margin sets how hard your advertising has to work. At a 40% margin, ads must return at least 2.5× their cost just to break even. Check yours with the break-even ROAS calculator, then measure live campaigns with the ROAS calculator.

Common mistakes

  • Adding the margin % to cost

    Cost $70 plus 30% is $91, which is a 23% margin, not 30%. For 30%, the price is 70 ÷ 0.7 = $100.

  • Leaving costs out of "cost"

    If shipping, packaging and payment fees are not in the cost figure, the margin shown is a gross figure that overstates what you keep.

  • Comparing your margin with someone else’s markup

    Suppliers and competitors often quote markup. Convert before comparing, or the numbers look far apart when they are not.

Frequently asked questions

What is the difference between margin and markup?

Both use the same profit but divide it by different numbers. Margin is profit ÷ selling price; markup is profit ÷ cost. Buying at $60 and selling at $100 is a 40% margin and a 66.7% markup.

How do I price a product for a 30% margin?

Divide cost by (1 − 0.30). A $70 cost needs a $100 price for a 30% margin. Adding 30% to cost ($91) only gives a 23% margin, a common mistake.

Can margin be more than 100%?

No. Margin is a share of the selling price, so it can approach 100% but never reach it unless the product costs nothing. Markup has no upper limit: 200% markup is a 66.7% margin.

Is this gross or net margin?

Gross margin, if cost means the cost of the product itself. To get closer to net margin, include every cost of making and delivering the sale, such as shipping, fees and advertising, in the cost figure.

Last reviewed 2 October 2026. This tool runs in your browser; nothing you enter is stored or sent to Boostlix.