Profit Margin & Markup Calculator
Calculate profit, margin percentage, and markup for your products or services and test different price points.
Product or service pricing
What it costs you to deliver one unit (materials, time, etc.).
What you charge customers for one unit.
Monthly or campaign‑level costs like rent, software, ad spend. Used to estimate a simple break‑even point.
This calculator focuses on unit economics. It doesn't include tax, discounts, or complex scenarios but gives you a quick sense of how profitable a price is.
Results
Margin is profit divided by selling price. Markup is profit divided by cost. Many teams think in markup when setting prices and margin when reviewing performance.
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Frequently Asked Questions
What is the difference between margin and markup?
Margin is profit divided by selling price, shown as a percentage. Markup is profit divided by cost. Many businesses use margin for reporting and markup to decide prices.
Can I use this to set my prices?
Yes, it helps you test different prices and see the impact on margin and markup. Remember to also factor in fixed costs, taxes, and market expectations.
Profit Margin vs Markup: What’s the Difference?
Many small businesses talk about "marking up" products by a certain percentage, but report performance in terms of margin. The numbers are related but not the same, and mixing them up can lead to under‑ or over‑pricing.
Markup is profit divided by cost. Margin is profit divided by selling price. A 50% markup does not mean a 50% margin — your margin will be lower.
Simple Example
If something costs $25 and you sell it for $50, your profit is $25. Markup is 100% (25 ÷ 25). Margin is 50% (25 ÷ 50). This calculator shows both so you can speak the same language as your accountant, partners, or team.
Using Margin in Your Business
Good practices
- • Set minimum margin targets per product or service
- • Re‑check margin before discounting heavily
- • Include overheads when thinking about long‑term profitability
Common mistakes
- • Confusing 50% margin with 50% markup
- • Ignoring fixed costs when picking prices
- • Dropping prices to win deals without checking impact on margin
This calculator is a quick unit‑economics helper, not accounting or tax advice. Always confirm pricing decisions against your full cost structure and local regulations.