Pricing · Every marketplace
Profit Margin Calculator
Profit, margin and markup from any two numbers — and the price you'd need for the margin you actually want.
Last verified: · Standard accounting definitions · by Felix Oluwakeye
- Margin formula
- profit ÷ revenue
- Markup formula
- profit ÷ cost
- Target-margin price
- cost ÷ (1 − margin)
Your numbers
Reverse: price for a target margin
Results
- Profit margin
- –
- Profit$0.00
- Margin (profit ÷ revenue)–
- Markup (profit ÷ cost)–
- Price for your target margin–
Margin is measured against the selling price; markup against your cost. The same sale always has a higher markup than margin — mixing them up under-prices your work.
Profit margin = (revenue − cost) ÷ revenue × 100. Sell at $100 with $60 cost and your margin is 40% — while the same sale is a 66.7% markup (profit ÷ cost). To price for a target margin, divide cost by 1 − margin. (Rates verified .)
| Fee | Rate | Applies to |
|---|---|---|
| Profit | revenue − cost | Dollars you keep on the sale |
| Margin | profit ÷ revenue × 100 | Share of the selling price that is profit |
| Markup | profit ÷ cost × 100 | Uplift applied to what the item cost you |
Worked example: $100 sale, $60 cost
- You sell for $100; the item cost you $60.
- Profit = 100 − 60 = $40.
- Margin = 40 ÷ 100 = 40% (of the selling price).
- Markup = 40 ÷ 60 = 66.7% (on your cost).
Same sale, two different percentages — margin 40%, markup 66.7%. Quoting one when you mean the other is the most common way sellers underprice.
Frequently asked questions
What is the difference between margin and markup?
Margin measures profit against the selling price (profit ÷ revenue); markup measures it against your cost (profit ÷ cost). A 50% markup is only a 33.3% margin. Retail targets are usually quoted as margin; supplier pricing habits are usually markup.
What is a good profit margin for online sellers?
After marketplace fees, most healthy e-commerce businesses land between 15% and 40% net margin depending on category — handmade and vintage trend higher, electronics resale lower. Compute yours after fees: run the sale through our eBay, Etsy or PayPal calculators first, then use the net proceeds as revenue here.
How do I price to hit a target margin?
Divide cost by (1 − target margin). For a 40% margin on a $60 item: 60 ÷ 0.6 = $100. The reverse field in the calculator does this — and it is not the same as adding 40% to cost, which would only give $84 and a 28.6% margin.
Should margin be calculated before or after marketplace fees?
After. Fees are a real cost of the sale: a $100 eBay sale carries roughly $14 in fees, so $60-cost merchandise is a 26% margin, not 40%. Chain the calculators: marketplace calculator first, then paste the net into this one as revenue.
Page changelog
- — Page published; formulas follow standard accounting definitions (margin on revenue, markup on cost).