Free 100% In-Browser Tool

Gross Margin & Product Markup Calculator

Compute gross profit margin, markup percentage, and optimal selling prices.

Quick Answer:Gross Margin is Profit divided by Revenue ((Revenue - Cost) / Revenue × 100), while Markup is Profit divided by Cost ((Revenue - Cost) / Cost × 100).
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How to Use the Margin Calculator: Gross Margin, Markup & Profit Formula

  1. 1Enter your unit cost of goods sold (COGS).
  2. 2Choose between entering your target selling price or desired markup percentage.
  3. 3Inspect gross profit dollar amount, gross margin percentage, and markup percentage.
  4. 4Adjust pricing targets to meet target commercial profitability goals.

Formula & How It Works

Margin vs Markup Equations

Margin = (Revenue - Cost) / Revenue × 100 | Markup = (Revenue - Cost) / Cost × 100

Standard retail accounting formulas for margin and markup.

Worked Examples

Retail Product with $60 Cost and $100 Price

Input: Cost: $60, Selling Price: $100

Explanation: A $40 profit on a $100 price represents a 40% margin, achieved by applying a 66.67% markup onto the $60 wholesale cost.

Result: Gross Profit: $40, Margin: 40.0%, Markup: 66.67%

Frequently Asked Questions

What is the difference between margin and markup?▼

Margin measures profit relative to the selling price, while markup measures profit relative to wholesale cost. Margin is always lower than the equivalent markup.

How do I calculate a 50% profit margin?▼

To achieve a 50% profit margin, you must double your cost (a 100% markup). If your cost is $40, your selling price must be $80.

What is a healthy gross profit margin for e-commerce?▼

Most consumer e-commerce businesses aim for a gross margin of 40% to 60% to absorb advertising acquisition costs, fulfillment, and customer returns.

Does this calculator run offline in my browser?▼

Yes. All price calculations run 100% client-side with zero server roundtrips.

Quick Reference & Conversion Table

Target Gross MarginEquivalent Markup RequiredCost: $50 Selling PriceCost: $100 Selling Price
10%11.11%$55.56$111.11
20%25.00%$62.50$125.00
30%42.86%$71.43$142.86
40%66.67%$83.33$166.67
50%100.00%$100.00$200.00

⚠️ Common Pitfalls to Avoid

  • •Confusing margin with markup (e.g. adding 25% markup produces only a 20% margin, not a 25% margin).
  • •Failing to account for payment gateway transaction fees and shipping in unit COGS.

💡 Practical Real-World Uses

  • •Pricing wholesale inventory for e-commerce marketplaces (Amazon, Shopify).
  • •Calculating restaurant dish food cost margins to maintain profitability.
Last reviewed & updated: 2026-11-11
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