Margin Calculator

A free calculator to find your profit margin, gross margin, and more. Enter your cost and selling price — we will do the math.

What is margin?

Margin tells you how much profit you make from selling something. If you buy a product for $50 and sell it for $80, your profit is $30. The margin shows how big that profit is, compared to the selling price.

In this case:

• Profit: $30
• Selling Price: $80
• Margin = $30 ÷ $80 = 37.50%

It is a quick way to check if your business is making enough money from each sale.

How to calculate profit margin

Use this formula:

Margin (%) = (Selling Price - Cost Price) ÷ Selling Price × 100

Below is the breakdown with an example:

• Cost Price: $40
• Selling Price: $100
• Margin = ($100 - $40) ÷ $100 × 100
• Margin = 60 ÷ 100 = 60%

So you are keeping 60 cents for every dollar of revenue.

Profit margin vs gross margin - are they the same?

They are often used interchangeably, but here is the difference:

• Gross Margin = (Revenue - Cost of Goods Sold) ÷ Revenue
• Profit Margin = Net Profit ÷ Revenue (after all expenses)

This calculator focuses on gross margin. If you are running a small shop or ecommerce business, this is the one you will likely need.

Difference between Margin and Markup?

This is one of the most common confusions in pricing.

• Margin is based on the selling price
• Markup is based on the cost price

Below is an example:

• Cost Price: $50
• Selling Price: $100

After calculate both result is:

• Margin = (100 - 50) ÷ 100 = 50%
• Markup = (100 - 50) ÷ 50 = 100%

So, In the above scenario Margin is 50%, and Markup is 100%

They give you different numbers even though the cost and selling price are the same.

When to use each:

• Use margin when analyzing profit as a percentage of revenue
• Use markup when setting prices from your cost base

Most businesses stick to one method for consistency usually margin, because it directly shows how much profit you keep from each sale.

Reasons to Use a Margin Calculator

• No formulas to memorize
• Save time on product pricing
• Make smarter pricing decisions
• Useful for freelancers, resellers, dropshippers, and more

Whether you sell t-shirts, digital products, or coffee mugs — knowing your margin helps you price right and avoid undercharging.

Reverse calculation: What price should I sell at?

Let's say you want a 30% margin, and your cost is $70. Use this formula:

Selling Price = Cost Price ÷ (1 – Desired Margin)

• Selling Price = 70 ÷ (1 – 0.30) = $100

So you’ll need to sell at $100 to hit a 30% margin.

Example:

Assume you are a Shopify seller and you import custom mugs at $5 each and want 40% margin.

• Desired Margin: 40%
• Cost: $5
• Selling Price = 5 ÷ (1 - 0.40) = $8.33

Now you know the minimum you should charge to stay profitable.