HIFreeTools
ENES

Free Profit Margin Calculator

Enter your cost and selling price to see the profit, the profit margin, and the markup — the three numbers behind any pricing decision.

Profit
40.00
Profit margin
40.0%
Markup
66.7%

Margin is profit ÷ price; markup is profit ÷ cost. Excludes fees and taxes.

Quick answer

Profit margin is profit as a percentage of the selling price: margin = (price − cost) ÷ price × 100. Markup is profit as a percentage of the cost: markup = (price − cost) ÷ cost × 100. They describe the same profit from two different bases.

Formula & method

profit = price − cost;  margin% = profit ÷ price × 100;  markup% = profit ÷ cost × 100
  • cost — what the item costs you
  • price — what you sell it for

Margin and markup are not the same number: a 50% markup is only a 33.3% margin.

Examples

Example 1: Cost $60, price $100
Input
cost 60, price 100
Result
Profit $40, margin 40%, markup 66.7%
Why
Profit 40; 40 ÷ 100 = 40% margin; 40 ÷ 60 = 66.7% markup.
Example 2: Cost $20, price $30
Input
cost 20, price 30
Result
Profit $10, margin 33.3%, markup 50%
Why
10 ÷ 30 = 33.3% margin; 10 ÷ 20 = 50% markup.
Example 3: Cost $8, price $8
Input
cost 8, price 8
Result
Profit $0, margin 0%
Why
Selling at cost means no profit.

When to use this tool

  • Setting a selling price for a product.
  • Checking the margin on an ecommerce or resale item.
  • Comparing markup and margin when negotiating.

Common mistakes

  • Confusing margin and markup. A 50% markup equals a 33.3% margin, not 50%.
  • Pricing to a target margin using the markup formula by mistake — it undershoots.
  • Forgetting fees, shipping, and taxes, which eat into real profit.

Frequently asked questions

What is profit margin?

Profit margin is your profit expressed as a percentage of the selling price: (price − cost) ÷ price × 100.

What's the difference between margin and markup?

Margin is profit over the selling price; markup is profit over the cost. The same $40 profit on a $100 sale is a 40% margin but a 66.7% markup.

How do I price for a target margin?

Divide your cost by (1 − target margin). For a 40% margin on a $60 cost: 60 ÷ 0.60 = $100.

Does this include fees and shipping?

No. Enter your true landed cost to include them, or treat the result as gross margin before selling fees.

Is this financial advice?

No. It's a pricing calculator for estimates, not financial advice.

What's a healthy profit margin for my business?

It varies by industry. Retail typically targets 20-40%, online sales 25-50%, software/services 50-80%. Lower margins require high volume; higher margins allow for discounts or reinvestment. Research your specific industry.

What margin do successful e-commerce businesses target?

Successful e-commerce typically aims for 25-50% gross margin after cost of goods, depending on category. Luxury items may have 60%+, while commodities may be 10-20%. Factor in marketing, fulfillment, and platform fees separately.

  • ✓ Free to use
  • ✓ No sign-up required
  • ✓ Runs entirely in your browser — nothing is uploaded.
  • ✓ Formula and method shown above
Last updated: How we calculateReport a correctionDisclaimer

Provided “as is” for general information only — results may be inaccurate, so verify before you rely on them. No warranty; use at your own risk.

Built and reviewed by HIFreeTools against the formula shown above and any authoritative references cited on this page. See our methodology and editorial standards.

Related tools

Related guides

Embed this tool on your site

Free to embed, no sign-up. Paste this code where you want the profit margin calculator to appear: