Margin Calculator
Calculate gross margin percentage, markup percentage and profit per unit from cost and selling price. Understand the difference between margin and markup.
- Markup
- 66.67%
- Gross profit
- $40.00
- Break-even ROAS at this margin
- 2.50×
Results update as you type. Values are kept in the URL, so you can share or bookmark this exact calculation.
Formula
Gross profit = Selling price − Cost Gross margin (%) = Gross profit ÷ Selling price × 100 Markup (%) = Gross profit ÷ Cost × 100 Break-even ROAS = 1 ÷ Gross margin
How to read Margin
Margin and markup describe the same profit from two directions. Margin divides profit by the selling price — the share of each sale you keep. Markup divides profit by cost — how much you added on top of what you paid. A 40% margin is a 66.7% markup; a 100% markup is a 50% margin.
Margin is the number that drives advertising decisions. It sets the break-even ROAS, the maximum cost per acquisition you can afford, and how much discounting a promotion can survive. Confusing markup for margin overstates all three.
Frequently asked questions
- What is the difference between gross margin and net margin?
- Gross margin subtracts only the direct cost of the product (COGS, sometimes fulfilment). Net margin also subtracts operating costs — marketing, salaries, rent, fees and taxes. Gross margin is the one used for pricing and ad economics; net margin is the one that ends up in the accounts.
- How do I convert markup to margin?
- Margin = Markup ÷ (1 + Markup). A 25% markup is 0.25 ÷ 1.25 = 20% margin. Going the other way, Markup = Margin ÷ (1 − Margin).
- Should marketplace commission be part of cost?
- For a per-order decision, yes: commission, payment fees and shipping you absorb all reduce what you keep from the selling price. Add them to cost to get the contribution margin that tells you whether a channel is actually profitable.