Profit Margin Calculator

Margin on cost vs. markup divisor

Many sellers make the mistake of adding the margin to the cost (e.g. Cost + 30%). That yields a smaller real profit than planned.

The correct formula is: Price = Cost / [1 - (Expenses % + Margin %)], so your net margin is exactly the planned percentage of the final price.

Worked example

Cost $50, expenses 15% and target margin 30%. Markup divisor = 1 - (0.15 + 0.30) = 0.55. Price = $50 / 0.55 = $90.91. Real net profit = $27.27 (exactly 30% of the price).

How to use

Enter the product cost, the expenses percentage (taxes, card fees and fixed costs) and your desired profit margin. The calculator applies the markup divisor and shows the ideal selling price, the markup multiplier and the net profit in currency — ready for you to price without selling at a loss.