Free tool
Profit Margin Calculator for Price Setting and Discount Tests
Pick what you are trying to work out, fill in the boxes that appear, and the cards show margin, markup, profit and a working. There is a table of what each discount does to your profit, so you can see the cost of a sale before you announce it.
Gross margin only: before tax, fees and running costs. Plain maths, not financial advice.
All figures are worked out in your browser and nothing is sent anywhere. Your numbers are remembered on your own device, and the share link stores them in the part of the address after the hash sign.
Five questions a seller asks about price
A seller of products, courses or print on demand work keeps running into the same questions. What margin am I making on this? What should I charge to reach a margin I want? What did this cost me if I know the price and my margin? How much must I sell to earn a set amount? And how does my whole range look? The Work out menu holds one mode for each.
| Mode | You type | You get |
|---|---|---|
| Margin from cost and price | Cost and price of one unit | Margin, markup, profit each |
| Price from cost and margin | Cost and a percent | The price to charge |
| Cost from price and margin | Price and a percent | The most the item can cost |
| Revenue for a profit target | Profit wanted, fixed costs, a margin | Revenue needed, optional unit count |
| Many items in a table | One line per item | Totals, best and lowest margin |
Margin and markup are not the same number
Margin divides profit by the selling price. Markup divides profit by the cost. An item that costs 60 and sells for 100 earns 40, which is a 40% margin but a markup of about 66.7%. The page shows the two side by side and states the same sale both ways, so you can see why a supplier who says they add 50% may not be earning a 50% margin.
Margin can never reach 100%, because that would mean a price with no cost at all. Markup has no such ceiling. In the modes that start from a percent, a menu beside the number lets you choose whether it is a margin or a markup, and a wrong choice is the most common source of mispriced products.
What a discount really costs you
When a price or unit count is shown, a table lists discounts of 0, 5, 10, 15, 20, 25 and 30 percent, plus the one you type into the discount box. For each row it gives the new price, the profit, the new margin and the extra units you must sell to earn the same total profit as before.
- A discount that equals your margin takes profit to zero.
- The extra units column shows how many more sales you need, which is often far more than the discount sounds like.
- If a discount leaves no profit, the column says never, because no number of sales would recover it.
This is the part of the page that earns its keep before a sale, since the sums are easy to get wrong in your head.
Checking a whole range in one go
Choose the many items mode and type one item per line as name, cost, price and the number sold. Commas, tabs and semicolons all separate the parts, so you can paste rows from a sheet. If the number sold is missing it counts as one. The result lists each item with its margin, markup and profit, a total row, and the best and lowest margin items. A line that cannot be read is skipped and named under the table, so nothing disappears quietly.
You can download the table as a CSV file or copy the result as text.
What this does not cover
The figures are gross margin only. They come before tax, payment fees, shipping, advertising and your own running costs, so a healthy gross margin does not mean a healthy business. The currency menu changes the symbol and formatting, and it does not convert between currencies. If you are pricing a store and want the product and checkout side planned properly, our ecommerce development page describes how we approach it. The maths here is plain arithmetic, not financial advice.
Frequently asked questions
How do I calculate gross margin?
Subtract the cost from the price, divide the result by the price, and multiply by 100. For a cost of 60 and a price of 100, that gives 40%.
What is the difference between margin and markup?
Margin is profit as a share of the price. Markup is profit as a share of the cost. The same sale gives a smaller margin than markup.
How do I find the price for a margin I want?
Use the price from cost and margin mode. It divides the cost by what is left after the margin, so a 40% margin on a cost of 60 gives 100.
Can I plan how much revenue I need for a profit goal?
Yes. Enter the profit you want, any fixed costs and a margin, and the tool shows the revenue needed. Add a unit price to see how many units that means.
Why does a small discount need so many extra sales?
A discount comes straight out of your profit on each unit. The table shows the extra units needed to earn the same total as before.
Does it include taxes or fees?
No. It works with gross margin only, so leave tax, fees and running costs for a separate calculation.
More free tools
- discount calculator: Price after one or two discounts, original price, percent off, and a side by side compare of up to three deals.
- percentage calculator: Percent of, percent change, difference, percentage points, reverse percent, discount and tax, with the steps shown.
- Invoice generator: Make a PDF invoice with items, tax, discount and logo, and keep your clients and past invoices on your device.
- bar graph maker: Make bar, horizontal bar, stacked bar and line graphs from pasted data and save them as PNG, SVG or PDF.
- pie chart maker: Make a pie or donut chart from pasted data or a CSV and save it as PNG, SVG or PDF.