Margin Calculator

Same profit, different denominator. Margin divides profit by the selling price; markup divides it by cost. A $60 item sold at $100: $40 profit = 40% margin = 67% markup. They diverge more as prices rise. 50% margin is 100% markup. The practical rule: accountants, investors, and 'gross margin' reports speak margin; 'keystone pricing' and supplier talk is often markup. Know which one a number is before you act on it.

Divide, don't multiply: price = cost ÷ (1 − margin). For a 40% margin on a $60 cost: 60 ÷ 0.60 = $100. The intuitive-but-wrong move. Multiplying by 1.40, gives $84, which is actually a 28.6% margin, an 11-point silent haircut on every sale. This single formula error is endemic in small ecommerce, and compounded across a year of sales it's the difference between a business and a hobby.

Everything that leaves with the sale: item cost, inbound shipping, packaging, platform fees, payment processing, and outbound shipping you're covering. For marketplace resellers this is where paper margins evaporate. A $100 eBay sale carries roughly 13–14% in fees before your item cost enters, so a shoe bought at $50 and sold at $100 isn't a 50% margin; after ~$14 fees and ~$12 shipping it's closer to 24%. Compute margin on the real number or the number lies to you.

Wildly industry-dependent, so ignore universal answers: groceries run 1–3% net, restaurants 3–9%, retail commonly 20–50% gross, software 70–90% gross. For reselling physical goods, experienced flippers typically want 30%+ margin after all fees or the time isn't worth it, with the caveat that fast 20% turns can beat slow 50% ones, because margin ignores velocity. Margin is a health metric; margin × turnover is the business.