E-commerce
Profit Margin Calculator
Enter your sale price and cost to see your profit, margin, and markup instantly.
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Margin = profit ÷ sale price. Markup = profit ÷ cost. For your true take-home on a marketplace, also subtract platform fees with a fee calculator.
How to calculate profit margin
Your profit is your sale price minus your cost. Profit margin expresses that profit as a percentage of the sale price, while markup expresses it as a percentage of your cost — two views of the same sale that are easy to confuse.
If you sell on a marketplace, fees eat into this margin. See your real net profit after fees with our platform fee calculators or compare every platform.
Margin, markup, and the price you set
Margin and markup describe the same profit from two angles, and mixing them up is a classic pricing mistake. A 50% markup on a $60 item gives a $90 price — but that is only a 33% margin, not 50%. Price off markup while thinking in margin and you quietly earn less than you planned.
The reliable approach is to decide the margin you need, then work backwards to the price — remembering that selling fees, shipping, and payment processing all come out of that margin. Confirm your real take-home with a platform fee calculator before you commit to a price.
Frequently asked questions
How do I calculate profit margin?+
Profit margin = (sale price − cost) ÷ sale price × 100. For example, a $100 sale with a $60 cost gives a $40 profit and a 40% margin.
What is the difference between margin and markup?+
Margin is profit as a percentage of the sale price; markup is profit as a percentage of the cost. The same $40 profit is a 40% margin on a $100 sale, but a 66.7% markup on a $60 cost.
What is a good profit margin?+
It varies by industry, but many online sellers aim for a 20–40% net margin after all costs. Remember that marketplace fees reduce your real margin — use a platform fee calculator to see your true take-home.
How can I improve my profit margin?+
Raise the price, lower the cost of goods, cut shipping and packaging, or move to a lower-fee sales channel. Because fees and costs come off every sale, even a small reduction lifts margin across your whole catalogue.
Is profit margin the same as profit?+
No. Profit is the dollar amount you keep; margin is that profit as a percentage of the sale price. Two products can earn the same $20 profit yet have very different margins.
Why is my real margin lower than this?+
Usually because selling fees, shipping, and payment processing are not in the cost figure. Add every cost — including the platform's cut — to see your true margin.