Profit Margin Calculator
Work out gross profit, margin, and markup from your cost and price — or run it backwards to find the price that hits the margin you want.
$60.00
Gross profit
60.0%
Profit margin
150.0%
Markup
$100.00
Revenue
Margin vs markup — they are not the same number
Margin divides profit by the selling price ($60.00 ÷ $100.00 = 60.0%). Markup divides the same profit by the cost ($60.00 ÷ $40.00 = 150.0%). Pricing to a 50% markup gives you a 33.3% margin, which is the single most common pricing mistake.
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How does the Profit Margin Calculator work?
Choose whether you're calculating margin from a known price, or working backwards to the price that achieves a target margin.
Enter your cost per unit — include the landed cost, not just the invoice price. Shipping, duties, and payment fees all belong here.
Enter your selling price or your target margin, and pick your currency.
Read off gross profit, margin, and markup together, so you can see how far apart margin and markup really are.
Protecting margin after the sale
Margin is set at pricing and lost at support. Every avoidable ticket, failed delivery question, and abandoned cart eats into the number you just calculated.
Support cost that doesn't scale with orders
ChatFlo answers the repetitive questions automatically, so a doubling in volume doesn't mean a doubling in support headcount.
Fewer abandoned carts
Shoppers who get a sizing, stock, or shipping answer in the moment are far more likely to complete the order than those who leave to find it.
Predictable pricing
Flat monthly pricing with no per-ticket or per-resolution fees, so your support cost stays forecastable through peak season.
Fewer returns from wrong expectations
Accurate pre-purchase answers about fit, materials, and delivery windows cut the returns that quietly destroy margin.
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FAQ
Gross profit margin = (selling price − cost) ÷ selling price × 100. If an item costs you $40 and sells for $100, the profit is $60 and the margin is 60%. Margin is always expressed as a share of revenue, never of cost.
They use the same profit figure but divide by different numbers. Margin divides profit by the selling price; markup divides it by the cost. A $40 item sold at $100 carries a 60% margin but a 150% markup. Confusing the two is the most common pricing error there is — pricing at a 50% markup gives you only a 33.3% margin.
It depends heavily on category. Typical gross margins run 30–50% for consumer electronics and general retail, 55–75% for apparel, and 70%+ for cosmetics and supplements. Gross margin is not profit, though — marketing, fulfilment, and support all come out of it afterwards.
For a realistic gross margin, yes. Use landed cost: the product price plus inbound freight, duties, and any per-unit packaging. Payment processing is usually 2–3% of the sale, and including it keeps you from over-estimating what each order actually contributes.
Because margin is profit as a share of revenue, reaching 100% would require a cost of zero. As the target approaches 100%, the required price approaches infinity. Markup, by contrast, has no upper bound — a 900% markup is perfectly possible.
Gross margin — revenue minus the direct cost of the goods. Net margin additionally subtracts operating costs like marketing, salaries, software, and rent, and is calculated across the business rather than per product.