Cost in, price out — and the math you keep getting wrong.
Whether you start from a cost and a target margin, a markup, or just a desired price, we'll show you all four numbers — cost, price, margin %, and markup % — so the next time someone asks, you know.
Built and reviewed by Stephen Omukoko Okoth
Mathematical Economist · ex-Morgan Stanley FI · Equilar
Mode
How are you starting?
Inputs
The numbers
Verdict
Sell at $ 33
40.0% margin • 66.7% markup
Margin = profit ÷ price. Markup = profit ÷ cost. They tell the same story from different reference points; both are useful, but never confuse them in a meeting.
Result
All four numbers
Cost
$ 20
Price
$ 33
Profit per unit
$ 13
Margin
40.0%
Profit ÷ Price
Markup
66.7%
Profit ÷ Cost
Margin/Markup ratio
0.60
Always < 1 for positive prices
Common questions
Margin vs markup — what's the difference?
Margin is profit as a percentage of price. Markup is profit as a percentage of cost. A 50% markup is only a 33% margin. Confusing them is the most common pricing error in small businesses.
What margin should I aim for?
Highly variable: software/SaaS often 70-90%, services 30-50%, retail 20-40%, food service 5-15%, commodity goods 3-10%. The right margin is whatever the market will bear given your differentiation and cost base.
How do I price for profit goal?
Working backward: price = (cost + target profit per unit) ÷ (1 − tax/fee %). The calculator handles markup-to-price and target-margin-to-price both ways.
Should I include shipping and fees?
Yes — anything that varies per unit goes into 'cost'. Payment processing fees, shipping, marketplace commissions, packaging. Forgetting these is how merchants discover their 'profitable' product is actually break-even.