Question 1

What’s the difference between margin and markup?

Accepted Answer

Margin is profit ÷ revenue (ex‑tax). Markup is profit ÷ cost. Example: Price $40, Cost $25 → Profit $15. Margin = 37.5%. Markup = 60%.

Question 2

What’s a “good” margin?

Accepted Answer

It varies by category and model. Many D2C brands target 50–70% product gross margin to fund marketing and overhead. See the Benchmarks section for typical ranges.

Question 3

Why is my break‑even price higher than my current price?

Accepted Answer

Discounts and fees reduce the revenue you keep, and shipping/fixed fees add to costs. Together they push break‑even higher. Either raise price, reduce costs/fees, or both.

Question 4

Do you include taxes?

Accepted Answer

No. This calculator is ex‑tax. If you need VAT‑inclusive modeling, use a tax‑aware calculator or add tax back into your price externally before analysis.

Question 5

Does quantity change margin?

Accepted Answer

Quantity changes total profit but not per‑unit margin/markup. Your per‑unit math stays the same; Q just scales the total.

Question 6

How do discounts and fees affect results?

Accepted Answer

Discounts lower net revenue. Variable fees are taken on that net; fixed fees add a constant cost per order. Both reduce profit per unit and lower margin.

Question 7

How do you calculate the target price from a margin goal?

Accepted Answer

We solve algebraically for P using your costs, fees, and target margin m. See Assumptions & methods for the exact formula.

Question 8

My target margin is very high and the price looks unrealistic—why?

Accepted Answer

If you set m near 1 (e.g., 80–90%) while keeping fees and fixed costs, the required price can explode. Lower the goal or reduce costs to get feasible prices.

Question 9

Should I include shipping as cost if customers pay for shipping?

Accepted Answer

If customers pay shipping and you don’t subsidize it, keep S as 0 here and treat shipping revenue separately. If you subsidize, include only your subsidized cost.

Question 10

Are the benchmark ranges universal?

Accepted Answer

No. They vary by industry, brand strength, and channel mix. Use them as orientation, not targets. Always reconcile with your own CAC, overhead, and unit economics.

Formula & Description	Equation
Net Price	$text{Net Price} = P cdot (1 - d)$
Fees	$text{Fees} = (text{Net Price} cdot f) + F$
Profit Per Unit	$text{Profit} = text{Net Price} - C - S - text{Fees}$
Margin & Markup	$text{Margin} = frac{text{Profit}}{text{Net Price}} ; ; ; text{Markup} = frac{text{Profit}}{C}$
Break‑Even Price	$P_{text{BE}} = frac{(C + S + F) / (1 - f)}{1 - d}$
Target Price	$P_{text{Target}} = frac{(C + S + F) / (1 - f - m)}{1 - d}$
Total Profit	$text{Total Profit} = text{Profit} cdot Q$

Profit Margin Calculator (Margin vs Markup) — Free & Accurate

Quick Start Guide

Enter price and cost.

Open Advanced to include discounts, payment fees, shipping, and fixed fees.

(Optional) Set a target margin to see the price required to hit your goal.

What This Calculator Covers

Good For

Not For

How We Calculate

Core Formulas

Frequently Asked Questions