Monetize Stage

Profit Margin Calculator

Enter any two. Get the rest. Margin, markup, cost, price — all directions.

Margin vs markup — the difference

These are the two most confused terms in selling. Same profit, different denominator.

  • Margin = (Price − Cost) / Price × 100. Profit as a percent of selling price.
  • Markup = (Price − Cost) / Cost × 100. Profit as a percent of cost.

Example: cost $15, price $40. Profit is $25.

  • Margin: 25 / 40 = 62.5%
  • Markup: 25 / 15 = 166.7%

US retailers quote margin. Suppliers quote markup. Convert before comparing.

The formulas

  • Cost + Price → Margin = (Price − Cost) / Price × 100
  • Cost + Margin → Price = Cost / (1 − Margin / 100)
  • Price + Margin → Cost = Price × (1 − Margin / 100)
  • Cost + Markup → Price = Cost × (1 + Markup / 100)

Typical US margins by category

  • Grocery / commodity retail — 5–15%
  • Physical e-commerce — 20–40%
  • Specialty retail / branded goods — 40–60%
  • Digital products / courses — 60–85%
  • SaaS / software — 70–90%
  • Services / consulting — 40–65%

Why markup is misleading

Sellers who quote markup often think they're making more than they are. A "100% markup" sounds impressive. It's only a 50% margin. When US ad costs run 20% of revenue, that 50% margin leaves 30% — which then has to cover all other costs.

Always translate to margin before pricing decisions. Margin is what actually has to cover ad spend, overhead, returns, and profit.

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Frequently asked questions

What is the difference between margin and markup?

Margin is profit divided by price. Markup is profit divided by cost. Same profit, different denominator.

What is a good profit margin?

Retail 20–50%, e-commerce 20–40%, digital products 60–80%, services 40–60%.

How do I calculate margin from cost and price?

Margin = (Price − Cost) / Price × 100. Example: cost $15, price $50 → margin is 70%.

What is a good markup for retail?

Keystone markup (2× cost) is the standard US retail baseline.

Estimates only. Real margins depend on category, competition, and operating costs. Not financial advice.