How to use it
- Type the cost of the item: what you paid for it or what it costs to make.
- Add expenses per sale: packaging, shipping you pay, a fee as a percentage of the price, and a fixed fee per order.
- Type the selling price to see profit, margin, markup and ROI.
- Or switch to target price mode and type the margin or the profit you want: the calculator gives you the price.
- Add a percentage to set aside for income tax if you want the profit after tax.
Margin, markup and ROI are not the same
They use the same numbers but divide by different things, which is why a 50% markup is not a 50% margin.
- Profit = price − cost − expenses.
- Margin = profit ÷ price. It tells you how much of each sale you keep.
- Markup = profit ÷ cost. It tells you how much you add on top of the cost.
- ROI = profit ÷ everything you spent on the sale, cost and expenses together.
| Price | Profit | Margin | Markup |
|---|---|---|---|
| $50 | $10 | 20% | 25% |
| $60 | $20 | 33.3% | 50% |
| $80 | $40 | 50% | 100% |
| $100 | $60 | 60% | 150% |
Margin can never reach 100%, but markup can go far above it. When a supplier or a course talks about a percentage, check which one they mean.
How to find the price for a target margin
With no fees, price = cost ÷ (1 − margin). For a $40 item and a 20% margin, that is 40 ÷ 0.8 = $50. When the marketplace takes a percentage of the price, subtract it as well: price = (cost + fixed expenses) ÷ (1 − margin − fee percentage). The calculator does this for you, and on the marketplace pages it also handles fees that change at price thresholds.
Break-even price
The break-even price is the lowest price at which you lose nothing: profit is zero after cost and every fee. It is the floor for discounts, offers and auction starting bids.
Selling on a marketplace
If you sell on eBay, Etsy, Mercari, Poshmark, Depop or Whatnot, each one has its own calculator here with its fee rules already built in, dated and linked to the source. Use this page for your own store, wholesale or anything with simple fees.
Questions
How do I calculate profit margin?
Divide the profit by the selling price. An item sold for $100 with $60 of profit has a 60% margin.
What is the difference between margin and markup?
Margin is profit divided by the price; markup is profit divided by the cost. A $40 item sold for $60 has a 33.3% margin and a 50% markup.
How do I price a product for a 30% margin?
Divide the cost by 0.7. If fees take a percentage of the price, subtract that percentage too before dividing, or let the target price mode do it.
What is a good profit margin?
It depends on the product and the channel. Resellers often aim higher on low-priced items because fixed fees and shipping take a bigger share. Compare your margin after every fee, not before.