How to use it
- Pick a mode: Cost + price → profit to analyse a price you already have, or Cost + target → price to find the price for a margin or markup you want.
- Enter the unit cost. Add a fixed extra cost per unit (packaging, shipping you pay) if there is one – it is treated as part of the cost.
- If a marketplace, platform or card processor takes a percentage of the sale, enter it as the fee. It is deducted from the price before profit is counted.
- Read the profit, margin and markup (or the selling price) – they update as you type. A loss is shown as a loss, together with the break-even price.
- Copy the summary or the link to share the numbers.
Example
A product costs 60 to buy, 5 to pack and ship, and the marketplace keeps 5% of the sale. You want a 30% margin. Cost basis = 65. Price = 65 ÷ (1 − 0.30 − 0.05) = 100.00. The fee is 5.00, the profit 30.00 = 30% of the price, and the markup on the 65 cost is 46.2%. Had you priced for 30% without the fee (65 ÷ 0.70 = 92.86) and then paid 5% on that, the margin would have ended at 25.4%.
Formulas
cost basis = unit cost + fixed extra cost
fee = price × fee%
profit = price − fee − cost basis
margin = profit ÷ price markup = profit ÷ cost basis
price for target margin m: cost basis ÷ (1 − m − fee%) (needs m + fee% < 100%)
price for target markup k: cost basis × (1 + k) ÷ (1 − fee%)
break-even price: cost basis ÷ (1 − fee%)
margin ↔ markup: markup = margin ÷ (1 − margin), margin = markup ÷ (1 + markup)Everything is per unit; multiply by the quantity for totals. The fee is assumed to be a flat percentage of the selling price with no fixed component – if your processor also charges a fixed amount per transaction, add it to the fixed extra cost. The tool does not apply sales tax or VAT: enter net prices, or use the VAT calculator first to strip the tax from a gross price. Margin is undefined when the price is 0 and markup when the cost is 0; the tool shows a dash instead of a number in those cases.
Sources: Corporate Finance Institute – Margin vs. markup, Investopedia – Gross profit margin.
Questions
- Why does a 40% markup give me less than a 40% margin?
- Markup is measured on the cost, margin on the price, and the price is larger. A 40% markup on a 100 cost is a 140 price with a profit of 40 – which is 28.6% of 140. To keep 40% of the price you need a 66.7% markup.
- How do I handle a fee that is charged as a percentage of the sale?
- Enter it in the fee field. In the target-price mode the tool solves for the price with the fee inside the equation, so the margin you asked for is the margin you get after the fee. Fees with a fixed part per transaction go into the fixed extra cost.
- What does the break-even price mean?
- The lowest price at which the sale neither makes nor loses money after the fee: cost basis ÷ (1 − fee). Anything above it is profit; it ignores costs you did not enter, such as overheads or taxes.
- Can I set a target above 100%?
- For markup, yes – a 150% markup is simply 2.5 × cost. For margin, no: profit cannot exceed the price, and the target margin plus the fee must stay below 100%, or no selling price exists.