Profit margin calculator
Enter what a product costs you and what you sell it for, and see your gross profit, margin and markup. Or start from the margin you want and get the price to charge.
How to calculate profit margin
Gross profit is the selling price minus the cost of the product: profit = price − cost.
Profit margin is that profit as a share of the price: margin = (price − cost) ÷ price × 100. It tells you how much of every sale you keep before other expenses.
To find the price for a target margin, divide the cost by one minus the margin: price = cost ÷ (1 − margin). For a 40% margin on a $30 product, the price is $30 ÷ 0.6 = $50.
Example
A product costs $30 and sells for $50. The gross profit is $20, the margin is 40% ($20 ÷ $50) and the markup is 66.7% ($20 ÷ $30).
Gross margin is not your real profit
Gross margin only subtracts the product cost. In an online store, every order also pays for shipping, payment fees, returns and ads, so the real profit per order is lower. Use the Shopify profit calculator to see the full picture per order, and remember to use prices without sales tax or VAT.