How it works
- Profit = Price − Cost
- Gross margin = Profit ÷ Price
- Markup = Profit ÷ Cost
- Price for a target margin = Cost ÷ (1 − Margin). Price for a target markup = Cost × (1 + Markup).
Example: cost 60, price 100 → margin 40%, markup 66.7%.
Learn more
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What is the difference between margin and markup?
Margin is profit as a share of the selling price. Markup is profit as a share of cost. A 50% markup is only a 33.3% margin.
Can margin be over 100%?
No. Margin is always below 100% because profit cannot exceed the price. Markup can be any size.
Which costs should I include?
For gross margin, use the direct cost of the product. For a fuller picture, also include fees and shipping per unit.
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