Margin calculator

Margin vs markup calculator

Margin and markup are easy to confuse. This calculator shows both from the same cost and sale price, then estimates the price needed for a target margin or target markup.

Gross profit before other costs $0.00
Margin 0.0%
Markup 0.0%
Price for target margin $0.00
Price for target markup $0.00

The difference in plain language

Margin compares profit to the sale price. Markup compares profit to the cost. Because they use different denominators, they will not match unless profit is zero. This is why a seller can say "I use a 100 percent markup" and still only have a 50 percent gross margin before fees and shipping.

Margin = profit / sale price. Markup = profit / product cost.

For marketplace sellers, gross margin is only the first layer. It ignores marketplace fees, payment processing, shipping, packaging, returns, and ads. Use this page to understand the relationship between cost and price, then use the main profit calculator to include the full selling cost.

Why sellers mix them up

Markup feels natural when buying stock. If a product costs 10 and you want to double your money, you may think "100 percent markup" and list at 20. Margin is more useful when reading business reports because it shows how much of the selling price remains as profit. On a 20 sale with a 10 cost, the profit is 10. That profit is half of the selling price, so the margin is 50 percent.

The confusion becomes expensive when a seller sets margin goals using markup math. A 30 percent markup does not create a 30 percent margin. On a product that costs 10, a 30 percent markup creates a 13 sale price and a gross margin of about 23.1 percent before other costs. After platform fees and postage, the real margin may be much lower.

Product cost Sale price Profit Margin Markup
$10.00 $15.00 $5.00 33.3% 50.0%
$10.00 $20.00 $10.00 50.0% 100.0%
$25.00 $40.00 $15.00 37.5% 60.0%