Markup, Margin & Profit Calculator
We convert cost and price (or a target margin/markup) into real economics: margin %, markup %, unit profit, total profit, and breakeven price/volume.
Your inputs
Don’t know the price yet? Enter a target margin or markup instead—our calculator derives the right price.
Results at a glance
Results interpretation: who our calculator helps
- E-commerce & retail: sanity-check your price against a target margin.
- SaaS & services: treat “cost” as fully burdened delivery cost to avoid phantom margins.
- Wholesale & manufacturing: compare markup vs margin across channels with overhead allocation.
- Founders & product managers: estimate breakeven volumes for new SKUs and promos.
Use cases & examples
Example 1 — Target margin: Cost $18.50, target margin 40%, 1,200 units, overhead $7,500 → price ≈ $30.83, unit profit ≈ $12.33, total profit ≈ (12.33×1,200 − 7,500) = $7,296.
Example 2 — Known price: Cost $22, price $33, 3,000 units, no overhead → margin 33.3%, total profit $33,000.
Example 3 — Breakeven units: Cost $12, price $18 (profit $6), overhead $24,000 → breakeven volume = 24,000 ÷ 6 = 4,000 units.
How our Markup & Margin math works
Formulas, steps & assumptions
Definitions
- Unit profit =
Price − Cost - Margin % =
(Price − Cost) ÷ Price - Markup % =
(Price − Cost) ÷ Cost - Revenue =
Price × Units - COGS =
Cost × Units - Gross profit =
(Price − Cost) × Units - Total profit (after overhead) =
Gross profit − Overhead - Breakeven units =
ceil(Overhead ÷ Unit profit)(if unit profit > 0) - Breakeven price at given units =
Cost + Overhead ÷ Units
When you provide a target margin (m), we solve price as Cost ÷ (1 − m). For a target markup (u), we solve price as Cost × (1 + u). If a price is supplied, we treat it as the source of truth.
Our outputs are planning estimates. If your costs vary across tiers or include freight, duties, or payment fees, add those into cost for accuracy.
Markup vs Margin — FAQ
What’s the difference between markup and margin?
Margin is profit as a percentage of selling price. Markup is profit as a percentage of cost. They’re related but not interchangeable: a 40% markup equals a 28.6% margin; a 40% margin equals a 66.7% markup.
How do we compute price from a target margin?
Price = Cost / (1 − Margin). For a 40% margin on a $20 cost, price = 20 / (1 − 0.40) = $33.33.
How do we compute price from a target markup?
Price = Cost × (1 + Markup). For a 50% markup on $20 cost, price = 20 × 1.50 = $30.00.
What counts as cost?
Use fully loaded cost per unit: materials, manufacturing, inbound freight, duties, packaging, pick/pack/ship, and payment fees. The more complete your cost, the truer your margin.
What is breakeven volume?
The number of units needed so unit profit × units = overhead. If unit profit is $5 and overhead is $25,000, breakeven = 5,000 units.
Is gross profit the same as total profit?
No. Gross profit ignores fixed overhead. Total profit subtracts overhead to show what you really keep.
Can we use this for services or SaaS?
Yes. Treat cost as the fully burdened delivery cost per unit (seat, project, hour). Overhead still applies for salaries, tools, and rent.
Does this include taxes?
Sales/VAT treatment varies by region and channel. Include expected fees in cost if they affect per-unit economics.
Pricing with Confidence: Markup, Margin, Profit & Breakeven Explained
We built our Markup, Margin & Profit Calculator to remove the guesswork from pricing. Whether you run a DTC brand, wholesale operation, agency, or software business, the core economics are the same: price should reflect customer value and cover cost, overhead, and profit. Below we explain how to translate strategy into numbers you can ship today.
Markup vs Margin: why they’re different
Teams often use markup (“add 40% on top of cost”) and margin(“we keep 40% of the selling price”) interchangeably. They’re not the same. A 40% markup yields a 28.6% margin; a 40% margin requires a 66.7% markup. Using the wrong one leads to under-pricing and shrinking cash.
Where profit really comes from
Profit is unit profit multiplied by volume, minus fixed overhead. That’s it. To improve profit you can raise price, reduce cost, increase volume, or lower overhead. Our calculator shows how each lever moves your breakeven and total profit, so you focus on the highest-impact changes.
Allocating overhead (without spreadsheets)
Many businesses forget to include fixed expenses—salaries, software, rent, equipment—when they eyeball “profit.” We let you plug a single overhead number to see the real breakeven units and price you need to clear. For product lines, allocate overhead proportionally to volume or revenue to compare SKUs.
When to price from value, not cost
Cost-plus pricing is fast, but it caps upside. If your product saves customers time, improves reliability, or strengthens brand, anchor on value-based pricing and verify that the implied margin is healthy. Our calculator then confirms your unit economics at that value-based price.
Discounts, promotions, and floors
If you must discount, set a floor price: the minimum that protects margin after payment fees and pick-pack-ship. Use our related Discount / Sale Price + Tax tool for stacked offers; then confirm final margin here.
Scaling: gross margin isn’t the finish line
High margin doesn’t guarantee profit if overhead balloons with growth. Revisit overhead regularly, automate manual work, and negotiate suppliers. A modest margin with low overhead can beat a high-margin business that’s expensive to run.
Common mistakes we see
- Using markup instead of margin when reporting to leadership.
- Ignoring payment/shipping fees in cost.
- Not allocating overhead for channel profitability.
- Chasing volume at thin margins without a clear breakeven plan.
Practical workflow
- Enter cost; include freight, duties, fulfillment, and fees.
- Set price or target margin/markup. Adjust until the unit profit feels right.
- Add expected units and overhead to see total profit and breakeven units.
- Sanity-check promotional pricing and wholesale tiers.
- Revisit costs quarterly and nudge price if needed.
Ready to run your numbers? Update the inputs above and we’ll do the math—live.