Tool

Margin & markup calculator

Enter cost and price to get margin and markup; or set the margin you want and we'll suggest the sale price.

Gross margin

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Profit as a percentage of the sale price

Profit per unit—

Markup (on cost)—

Price for target margin—

Assumptions & method

Margin = (price − cost) ÷ price. Markup = (price − cost) ÷ cost. They are different percentages: don't confuse them when setting prices.
Suggested price for a target margin m: price = cost ÷ (1 − m).
All amounts exclude IVA (Mexican value-added tax): IVA is not your income, it is passed through. Work out prices with IVA separately in the IVA calculator.
Gross margin per unit; it does not deduct fixed costs, sales commissions or taxes on profit.

FAQ

The essentials, in short

What is the difference between margin and markup?

With a cost of $700 and a price of $1,000: profit is $300; margin is 30% (on the price) and markup is 42.9% (on the cost). Someone who 'adds 30% to cost' ends up with only 23% margin: the classic pricing mistake.

How do I set a price for the margin I want?

Divide the cost by (1 − target margin): for a 40% margin with a cost of $700, price = 700 ÷ 0.60 = $1,166.67. The 'suggested price' line does it for you.

Do discounts destroy your margin?

More than it seems: with a 30% margin, a 10% discount on the price wipes out a third of your profit. Before discounting, work out how many extra units you'd have to sell just to break even.

Next step

Tell us about your deal

Tell us how much you need and what collateral you can offer. We'll tell you frankly whether it's viable and how we'd structure it.

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