Free tool · No sign-up
Profit margin & markup calculator
Enter what a product costs and what you sell it for. See your margin, markup and profit, the price you need for a target margin, and what a discount does to it.See margin, markup, profit and the right price for any product.
Runs in your browser. Nothing you enter is sent anywhere.
- Margin and markup together
- Price for a target margin
- Discount impact
How it works
How the margin calculator works
- 01
Enter cost and price
What one unit costs you, and what you sell it for. Use the cost landed at your door, including the shipping you pay to get it.
- 02
Set a target margin
The margin you want to make. The calculator shows the price that gets you there and the markup that equals it.
- 03
Test a discount
Enter a sale percentage to see the new profit and how many more sales you need to earn the same.
Reading the results
Margin, markup and what they mean
Profit margin
Profit as a share of the selling price. A $50 product that costs $20 makes $30, which is a 60% margin.
Markup
Profit as a share of the cost. The same product has a 150% markup, because $30 is 150% of $20.
Why they differ
Both use the same profit but divide it by different numbers. Margin can never reach 100%; markup can go far above it.
Discount impact
A discount comes straight out of your profit, not your price. A 20% discount on a 60% margin product cuts profit per sale by a third.
Putting it to work
Using margin to price your products
- 01
Price from margin, not markup
Decide the margin you need to cover ads, fees and overheads, then let the calculator give you the price.
- 02
Check discounts before you run them
Look at “sales needed to earn the same” first. If it’s above what the sale can realistically bring, offer a smaller discount or a free gift.
- 03
Go further with the profit calculator
Margin here is gross margin. To include payment fees, refunds and ad cost per order, use the Shopify profit calculator.
What this calculator leaves out
- Payment fees, refunds and ad costs. Use the Shopify profit calculator for profit after those.
- Taxes such as VAT or sales tax. Enter prices without tax.
- Fixed costs like your Shopify plan, apps and staff.
Free 3‑point review
Good margins, not enough sales?
I look at your store by hand, on mobile and desktop, and send you the three fixes most likely to lift your conversion rate.
Get My Free 3‑Point ReviewRelated tools
More free Shopify tools
- Shopify Fees CalculatorWork out what each Shopify plan really costs once card fees, transaction fees and apps are added.
- Shopify Revenue EstimatorModel what a Shopify store could earn, from its real prices and traffic and conversion assumptions you set.
- Shopify Store Name GeneratorGet store name ideas from what you sell and the feel you want, then check the matching domain.
- All free Shopify tools16 tools, no sign-up, grouped by what you need to do.
Shopify is a trademark of Shopify Inc. These tools are independent: they aren’t made, endorsed or supported by Shopify. They read only public pages, the same ones any visitor can open.
FAQ
Questions about margin and markup
How the numbers are worked out and where the rates come from.
Ask me about your storeWhat is the difference between margin and markup?
Margin is profit divided by the selling price. Markup is profit divided by the cost. A product that costs $20 and sells for $50 has a 60% margin and a 150% markup.
How do I calculate profit margin?
Subtract the cost from the selling price to get profit, then divide the profit by the selling price and multiply by 100. For example, ($50 − $20) ÷ $50 × 100 = 60%.
How do I calculate markup?
Subtract the cost from the selling price, divide by the cost and multiply by 100. For example, ($50 − $20) ÷ $20 × 100 = 150%.
How do I convert margin to markup?
Markup = margin ÷ (1 − margin). A 40% margin is a 0.4 ÷ 0.6 = 66.7% markup. The table in the results shows common values for your cost.
What price do I need for a 50% margin?
Divide your cost by (1 − the margin). For a 50% margin, that’s cost ÷ 0.5, so a $20 product needs a $40 price. Enter any target margin and the calculator does this for you.
What is a good profit margin for a Shopify store?
It depends on what you sell and how you get customers. Stores that pay for ads usually need a higher gross margin, because ad costs, fees and refunds come out of it. Work out your real profit with the Shopify profit calculator.