Profit margin and selling price calculator
Price correctly: margin is based on the selling price and markup on the cost.
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How it is calculated
price = cost / (1 − margin)
margin = (price − cost) / price
markup = (price − cost) / cost
A 25 % margin is not a 25 % markup: to earn 25 % of the selling price you need a 33.3 % markup on cost.
Frequently asked questions
If an item costs $60 and I want a 25 % margin, what price?
$80: 60 / (1 − 0.25).
What is the difference between margin and markup?
Margin is profit as a share of price; markup is profit as a share of cost. With the same numbers, markup is always higher.