A good selling price has to cover more than the item itself. Payment processing, marketplace commissions and per-order charges all reduce what you keep. This calculator includes those costs so the displayed margin reflects the money left after the expenses you enter.
Profit margin formula
Profit = revenue − item costs − selling fees
Profit margin = profit ÷ revenue × 100
For example, an item that costs $25 and sells for $50 with no fees produces $25 profit and a 50% margin. Currency does not affect the formula, so the calculator works with dollars, pounds, euros or any other currency as long as every amount uses the same one.
Margin and markup are not interchangeable. A product bought for $50 and sold for $75 has a 50% markup, but its profit margin is only 33.33%.
What the results mean
- Revenue is selling price multiplied by quantity.
- Total costs are cost per item multiplied by quantity.
- Selling fees combine the percentage and fixed fees you enter.
- Net profit is the amount left after entered costs and fees.
- Profit margin shows profit as a percentage of revenue.
- Net markup shows profit as a percentage of product cost.
Break-even and target pricing
The break-even price is the lowest price that covers the entered item cost and selling fees. The target-margin tool goes one step further: choose the percentage of each sale you want to keep as profit, and it calculates the required selling price.
Remember to include other costs—such as shipping, packaging, advertising, labour and taxes—in the item cost when they apply. A calculator can only account for the figures entered.
Common questions
What is a good profit margin?
It depends on the industry, sales volume, overheads and risk. Compare your result with your own operating costs and reliable benchmarks for your particular market rather than using one universal percentage.
Can profit margin be negative?
Yes. A negative result means costs and selling fees are greater than revenue, so each transaction makes a loss.
Does this calculator include tax?
There is no separate tax field because tax treatment varies. Enter any non-recoverable tax as part of the item cost or fixed fee, and use prices consistently as either tax-inclusive or tax-exclusive.