Sales Profit Calculator

About this sales profit calculator

Margin and markup are the two most-confused numbers in small business pricing. They describe related but different things and using one when you meant the other is the most common cause of accidental under-pricing.

Markup is the profit as a percentage of cost. If you buy a product for 100 and sell it for 150, the markup is 50%. Margin is the profit as a percentage of the selling price. The same product has a margin of 33%. Both numbers describe the same transaction, but they answer different questions.

Use margin when you want to know what percentage of revenue is profit. Use markup when you want to know how much to add to your cost to hit a target margin. The calculator shows both so you can pick the right framing for the conversation.

How to use it

1. Enter your cost per unit (what you paid).
2. Enter your selling price per unit (what the customer pays).
3. Enter the number of units sold (or 1 for per-unit math).
4. Read the profit per unit, the margin, the markup and the total profit.

Tips & notes

• When negotiating with a supplier, work in margin. When negotiating with a customer, work in markup. They each sound smaller in the language of the other side.
• Set a target margin first, then calculate the required markup. Setting markup first and seeing the resulting margin almost always disappoints.
• Always include fixed costs (rent, salaries) somewhere — pure unit margin can be deceptive if overheads eat the profit.

Frequently asked questions