What is the profit margin calculator?
This calculator helps online store owners and sellers understand how much they really earn on every product. It calculates profit per unit, profit margin, markup, total revenue and total profit. A reverse mode lets you enter the margin you want and get the suggested selling price.
How to use it
- Choose a mode: Profit from selling price if you already know your price, or Price from target margin when pricing a new product.
- Enter the product cost — supplier price or materials and production cost.
- Enter the extra cost per unit: shipping, packaging, marketplace and payment fees. Ignoring these is the most common pricing mistake.
- Enter your selling price or target margin, then the expected units sold to see total profit.
- Pick your currency; results update instantly.
Margin vs. markup
Many sellers confuse the two, and the confusion can be expensive:
- Profit margin = profit ÷ selling price × 100. It shows what share of each sale you keep.
- Markup = profit ÷ cost × 100. It shows how much you added on top of cost.
Example: a product costs 60 and sells for 100. Profit is 40, the margin is 40% and the markup is 66.7%. If you want a 40% margin but only add 40% to cost, your price becomes 84 and your real margin just 28.6%.
How is price calculated from a target margin?
The correct formula is price = total cost ÷ (1 − margin). With a total cost of 12 and a 40% target margin, the price is 12 ÷ 0.6 = 20.
What is a good profit margin?
It depends on the industry. Digital and printable products can exceed 80% because each extra copy costs almost nothing, while electronics often sit between 10% and 20%. As a rule of thumb, a margin below 20% leaves little room for ads, discounts and returns — which is why the tool warns you when your margin is thin.
Tips to increase your margin
- Negotiate better supplier prices for larger orders.
- Create bundles to raise the average order value.
- Improve photos and descriptions to justify a higher price instead of competing on price alone.
- Review marketplace and shipping fees regularly — silent increases eat profit.