Calculators / Profit margin

Profit margin calculator

Put in what the product costs you and what you sell it for. Add your fees and shipping if you want the number you actually keep.

Your numbers

$
What you paid for one unit, including inbound shipping.
$
$
Fees, packaging, the shipping label you pay for.

Per sale

Selling price
Product cost
Other costs
Profit
Margin
Markup on cost

The formula

Profit = price − product cost − other costs
Margin = profit ÷ price × 100
Markup = (price − product cost) ÷ product cost × 100

Margin answers "how much of each dollar a customer pays do I keep?". Markup answers "how much did I add on top of what I paid?". They use the same profit but divide by different things, so they are never the same number. A 50% markup is a 33.3% margin, not 50%.

Markup here only looks at the product cost, because that is how suppliers and pricing rules use the word. Margin takes every cost you entered.

Worked example

A candle that costs $20.00 to make and sells for$35.00, with no other costs counted yet:

Profit35.00 − 20.00 = $15.00
Margin15.00 ÷ 35.00 = 42.9%
Markup15.00 ÷ 20.00 = 75.0%

Now count what the order really costs to send. Say the card fee is 2.9% plus 30 cents ($1.32), the box and tissue are $0.80, and you pay $4.50 for the label because shipping is free for the customer. That is $6.62 of other costs.

Profit35.00 − 20.00 − 6.62 = $8.38
Margin8.38 ÷ 35.00 = 23.9%
Markupstill 75.0% (product cost only)

Same candle, same price. The margin almost halved once the order costs went in, which is why the optional box above matters more than it looks.

Mistakes that make the number wrong

Dividing by cost and calling it margin

This is the most common one. It gives you the markup, which is always bigger, so the store looks healthier than it is.

Leaving out per-order costs

Fees, packaging and free shipping are small on one order and large across a month. If you only ever check margin on product cost, you will find the gap at tax time instead.

Raising prices by a fixed markup

"Cost plus 50%" keeps the markup the same when costs go up, but every cost you did not include in that 50% now takes a bigger bite. Rerun the margin when a supplier or carrier changes their prices.

Read more

Formula and examples last checked October 9, 2026.

Questions people ask

What is a good profit margin for an online store?

There is no single number. Stores selling cheap, easy-to-copy products often live on 10 to 20 percent after fees and shipping. Stores with their own brand or handmade goods can hold 40 percent or more. The useful comparison is your margin last quarter against your margin now, and your margin against the cost of getting a sale through ads.

Is margin the same as markup?

No. Both start from the same profit, but margin divides it by the selling price and markup divides it by the cost. Buy at $50, sell at $100: markup is 100 percent, margin is 50 percent. If a supplier or a pricing rule talks about markup and your accounts talk about margin, check which one you are looking at before you compare them.

What should go in "other costs per sale"?

Anything you pay because this one order happened. Platform and payment fees, the packaging, the shipping label if the customer does not pay for it, and any per-order app charges. Leave out rent, software subscriptions and your own salary. Those are fixed costs and belong in a break-even calculation, not in the margin on one sale.

Why does the calculator show a negative margin?

Your costs are higher than your price, so every sale loses money. It usually happens after a supplier puts prices up, when shipping is offered free without being priced in, or during a sale. Fix the inputs first, then decide whether the price has to move.

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