Profit Margin Calculator
Convert between cost, price, margin and mark-up, and price a product from a target margin.
Pricing a product means moving between four numbers: the cost, the selling price, the margin on the price and the mark-up on the cost. Two of them determine the other two, and getting the direction wrong is how a business sells at a loss without noticing.
Enter the cost and the margin you want, and this calculator returns the price, the mark-up, the profit per unit and the same figures for a whole order.
At a glance
- What you enter
- Cost per unit, Target profit margin, Quantity, Price charged elsewhere (optional)
- What you get
- Selling price, Profit per unit, Profit for the order, Mark-up on cost
- Formula shown
- Yes - every step, right below your results.
- Cost and privacy
- Free, no account needed, and nothing you type is stored.
See worked examples ↓ Read the FAQ ↓ Share this calculator ↓
Results are estimates for general information only - always verify with a professional or official source before acting on them.
How to use the Profit Margin Calculator
- 1 Enter Cost per unit
- 2 Enter Target profit margin - Profit as a share of the selling price, not of the cost.
- 3 Enter Quantity (units)
- 4 Enter Price charged elsewhere (optional) - Enter 0 to skip the comparison.
- 5 Press Calculate. You get Selling price, Profit per unit, Profit for the order, Mark-up on cost, and every intermediate step stays visible under “How is this calculated?”
- 6 Change one number at a time to see what moves the result - that is usually the most useful thing a calculator can tell you.
Worked examples
Real numbers run through this calculator. Open any example to load it into the form above and change it.
A $45 unit cost priced at a 35% margin
An order of 200 units with the competitor slightly above the calculated price.
You enter
- Cost per unit
- $45.00
- Target profit margin
- 35%
- Quantity
- 200 units
- Price charged elsewhere (optional)
- $72.00
You get
- Selling price
- $69.23
- Profit per unit
- $24.23
- Profit for the order
- $4,846.15
- Mark-up on cost
- 53.8%
The selling price is $69.23, which is $24.23 of profit a unit and a mark-up of 53.8% on cost. Cost is 65% of the price, so a discount above 35% would sell below cost. The order brings in $13,846.15 of revenue against $9,000 of cost, leaving $4,846.15 of profit, and the price sits $2.77 below the $72 charged elsewhere.
An $8 unit cost priced at a 60% margin
A high volume order on a cheap item where the mark-up looks misleading.
You enter
- Cost per unit
- $8.00
- Target profit margin
- 60%
- Quantity
- 1,500 units
- Price charged elsewhere (optional)
- $19.00
You get
- Selling price
- $20.00
- Profit per unit
- $12.00
- Profit for the order
- $18,000.00
- Mark-up on cost
- 150.0%
The price is $20.00, which is $12.00 of profit a unit and a mark-up of 150% on cost. Cost takes 40% of the price, so the discount headroom is 60%. On 1,500 units the revenue is $30,000 against $12,000 of cost, leaving $18,000 of profit, and the price is $1.00 above the comparison entered.
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Frequently asked questions
How do I set a price from a margin rather than a mark-up?
Divide the cost by one minus the margin. A cost of $45 at a 35% target margin gives a price of $69.23, because 65% of the price has to be the cost and $45 divided by 0.65 is $69.23. Adding 35% to the cost instead would give $60.75, which is only a 25.9% margin.
That difference is why cost plus a percentage so often produces a lower margin than intended. If you think in mark-up, convert it first: a 100% mark-up is a 50% margin, and a 50% mark-up is a 33.3% margin.
Why can I not enter a margin of 100%?
Because a 100% margin would mean the cost is zero. The formula divides the cost by one minus the margin, so a margin of 100 leaves nothing to divide by, and the field is capped at 95 for that reason.
At a 95% margin the price is twenty times the cost, which is a real situation for software and digital products but almost never for anything physical. If you need a number above the cap, you are probably describing a mark-up rather than a margin.
What is the discount headroom figure for?
It shows the largest cut you could give and still break even. On a price of $69.23 and a cost of $45, the profit per unit is $24.23, which is 35% of the price, so any discount above 35% sells below cost.
It is a limit rather than a target. A discount that keeps the business above water can still be a mistake if it becomes the normal price, and the quantity and revenue lines show what the order has to become for the lower price to be worth it.
What should I do with the price charged elsewhere field?
It compares your calculated price with a competitor price and shows the gap in money. A price of $69.23 against a competitor at $72 means you are $2.77 below them, and a price of $20 against one at $19 means you are $1 above.
The field is optional and the comparison is only arithmetic. A higher price can be justified by service, delivery or a better guarantee, and a lower one is not automatically an advantage. What matters is that the margin you set is one you can sustain if the competitor cuts their price.