Enter what something costs you and what you sell it for to see profit, margin and markup side by side. Switch modes to work out gross margin for a whole period from revenue and cost of goods sold, or to find the selling price that hits a target margin or markup. Everything runs in your browser. Nothing you type is sent to We.Inc or anyone else.
A candle costs $6.40 in wax, wick and jar, plus $0.90 for the box and label, so $7.30 in total. You want a 60% gross margin. The price is 7.30 divided by 0.40, which is $18.25. Rounded up to $18.99 the margin is 61.6% and the markup is 160%.
If you had added 60% to the cost instead, you would have charged $11.68, a margin of only 37.5%. That gap is why this calculator shows both numbers for every price.
A small shop sells $12,400 of goods in a month. The stock it sold cost $7,150 and card fees came to $390. Counting the fees as part of the cost of each sale, cost of goods is $7,540 and gross profit is $4,860, a gross margin of 39.2%.
Rent, software and advertising are not in that number. They are paid out of the $4,860, which is why a healthy gross margin matters: it is what covers everything else.
Subtract the cost from the selling price to get profit, then divide the profit by the selling price and multiply by 100. A product that costs $30 and sells for $50 makes $20 profit, which is a 40% margin.
Both use the same profit figure. Margin divides it by the selling price; markup divides it by the cost. For a $30 cost and $50 price, margin is 40% and markup is 66.7%. Margin tells you how much of each sale you keep; markup tells you how much you added on top of cost.
Divide the cost by one minus the margin as a decimal. For a 40% margin on a $30 cost, the price is 30 divided by 0.6, which is $50. Adding 40% to the cost gives $42, which is only a 28.6% margin.
Gross margin is revenue minus the cost of goods sold, divided by revenue. Cost of goods sold covers the direct cost of what you sold, such as stock and materials, but not rent, wages for general staff or advertising. Those come out later, in operating and net margin.
It depends on the trade. Resellers of branded goods often work on thin gross margins, while handmade goods, services and digital products usually need much higher ones to cover time and overheads. Compare your figure with your own costs and goals rather than a single benchmark.
No. Margin is a share of the selling price, and profit can never be larger than the price unless the cost is negative. Markup has no upper limit: a $10 item sold for $40 has a 300% markup and a 75% margin.
Yes, with no signup. It runs in your browser and nothing is sent anywhere.
Related: Markup Calculator, Break-Even Calculator, Payment Processing Fee Calculator, Etsy Fee Calculator, Website builder.
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