Profit Margin Calculator
Enter cost and sale price to see gross profit margin and markup. Most sellers confuse markup with margin — this calculator shows both.
By Marginory team · Online sellers with hands-on experience across Etsy, Shopify & PODUpdated Fee data verified against official platform documentation
Inputs
$
$
Results
Gross profit$15.00
Profit margin60.0%
Markup on cost150.0%
Margin = profit ÷ price. Markup = profit ÷ cost. A 50% markup = 33% margin, not 50%.
How this is calculated
Profit margin: (Price − Cost) / Price × 100
Markup on cost: (Price − Cost) / Cost × 100
Assumptions:
- Gross margin only — no platform fees, taxes, or shipping deducted
- Use the Profit Calculator for net margin after all fees
Frequently Asked Questions
What is profit margin and how is it calculated?
Profit margin is gross profit expressed as a percentage of the sale price: (Price − Cost) / Price × 100. On a $25 item that costs $10 to make, profit is $15, so margin = $15 / $25 = 60%. Margin always uses the sale price as the denominator — that's what separates it from markup.
How is margin different from markup?
Margin divides profit by price; markup divides profit by cost. Same $10 cost, $25 price, $15 profit: margin is 60% ($15/$25) but markup is 150% ($15/$10). The two numbers are always different (except at 0%), and mixing them up leads to underpricing — a seller aiming for '50% profit' by adding a 50% markup on cost actually ends up with only 33% margin. Use the Markup Calculator when you're working from cost and a target markup instead.
What's a good profit margin for an online seller?
It depends on the business model: 30%+ gross margin is typical for handmade or branded physical products, 15–25% for reselling/dropshipping, 50%+ for print-on-demand with organic traffic, and 85%+ for digital products. These are gross margins before ad spend and overhead — net margin after those costs is usually 10–20 points lower.
Does this calculator include platform fees?
No — this is gross margin only, based purely on cost and sale price. Etsy, Shopify, eBay, and TikTok Shop all take a cut before you see the money, and payment processing adds another fee on top. For your real take-home margin after all fees, shipping, and ad spend, use the Profit Calculator or Pricing Calculator, which support platform-specific fee presets.
What's a common mistake when setting margin targets?
Treating margin as if it scales linearly with markup. Going from a 100% markup to a 150% markup doesn't add 50 percentage points of margin — it moves margin from 50% to 60%, a 10-point gain. As markup climbs, each additional percentage point buys smaller and smaller margin gains, so chasing higher markup has diminishing returns on your actual profit percentage.
Does this work for any platform or product type?
Yes — margin is just math on cost and price, so it applies identically whether you sell on Etsy, Shopify, eBay, TikTok Shop, or your own site, and whether the product is physical, print-on-demand, or digital. Only your cost inputs change by platform; the formula doesn't.