Profit margin calculator

Margin divides profit by the selling price; markup divides the same profit by the cost. A product that costs $25 and sells for $50 has a 50% margin and a 100% markup - one $25 of profit, described two ways. Pricing to a 50% markup when you meant a 50% margin leaves you a third short on every unit, which is why this calculator shows both side by side.

Gross margin is (selling price - unit cost) / selling price x 100. Net margin uses the same denominator but subtracts every per-unit cost first: shipping, payment processing, packaging and allocated overhead. Gross margin measures the product; net margin measures the business.

Because the payment processing fee is a percentage of the price, so it rises as the price rises. With $10.10 of fixed costs and a 2.9% card fee, a $10.10 price still loses money on the fee. The break-even price solves price = fixed costs + price x fee rate, which gives $10.40. Adding up the cost lines at your current price gives the wrong answer.

Landed cost: what one sellable unit costs delivered to you, including the supplier invoice, freight, duty and any prep. Using the supplier invoice price alone is the most common way to overstate a margin, because freight and duty land weeks later and never make it back into the model.

It depends on the channel and how much of your cost base is fixed. There is no universal number, and any tool that gives you one is guessing. What this calculator can tell you honestly is the margin you have, the markup that produces it, and the price you would need for a different one.

No - it is net profit divided by the total cost per unit, which includes shipping, payment fees and overhead alongside the goods. That is the money actually tied up in getting one unit sold. Dividing by the product cost alone produces a materially higher and more flattering number.