Business & Seller

Profit Margin Calculator

Margin and markup are different numbers, and confusing them costs small businesses more money than almost any other pricing mistake.

Last updated July 31, 2026Free, no sign-upHow it works

Profit per unit

high confidence

$33.96On a $60.00 sale, after every cost entered

Exact figure. This calculator has no modeled range — the number follows directly from your inputs.

What it is worked out from

Product cost$24
Payment processing (2.9% + $0.30)$2.04

Same in every state
Assumptions 2026.07.1

Why high: this is exact arithmetic on your inputs and the published figures used, so there is no modeled range.

Key figures

Net profit margin: 5,660%
Markup on cost: 15,000%
Gross margin, before fees: 6,000%Price less product, shipping, and packaging — the figure before any platform or payment fee.
Total cost per unit: $26.04
Fees per unit: $2.04
Price needed for a 30% margin: $36.21Solved with the percentage fees applied to the new price, which is why it is not simply cost divided by 0.7.
Price needed for a 50% margin: $51.59

Cost breakdown

Estimated cost of each component, with low, typical, and high values.
Component	Low	Typical	High
Product costMaterials	$24	$24	$24
Payment processing (2.9% + $0.30)Other	$2.04	$2.04	$2.04
Profit per unit	$33.96	$33.96	$33.96

The rows above are the figures the profit per unit is worked out from, not parts that add up to it.

What moved your estimate

Margin and markup are not the same number
This product carries a 56.6% margin and a 150.0% markup. Margin is profit as a share of the price; markup is profit as a share of the cost. Confusing them is the most common pricing error in small business, and it always errs the same way — toward underpricing.

How this number was produced

Direct costsproduct + shipping + packaging$24.00
Fees0% platform + 2.9% + $0.30 payment$2.04
Profit$60.00 − $26.04$33.96
Margin$33.96 ÷ $60.0056.6%
Markup$36.00 ÷ $24.00150.0%

Adjustments applied

Fee load on price×0.97
You keep 96.6% of the sale price before product costs.
Cost as a share of price×0.43
$26.04 of every $60.00 sale is cost.

Notes and sources4 notes, 1 source

Worth knowing

Margin divides profit by price. Markup divides it by cost. A 50% markup is a 33% margin, not a 50% one — and pricing as though they were the same is how a business ends up busy and unprofitable.
The target price figures solve for the fee percentages applying to the new, higher price. Dividing cost by 0.7 to get a 30% margin gives the wrong answer whenever percentage fees are involved, because raising the price raises the fee too.
Overhead is optional and off by default, because per-unit profit and whole-business profit are different questions. If you want to know whether the business works rather than whether the product does, allocate rent, software, and your own time across your units and switch it on.
No tax is calculated. Sales tax handling depends on where you and your buyer are and on whether the platform collects it for you; income tax on the profit depends on your business structure. Both need a proper answer rather than an approximation.

Sources

Published seller fee schedules from each platform: Etsy Fees & Payments Policy and Help Center, eBay Selling Fees help pages, Amazon Selling on Amazon fee schedule, Shopify pricing page, TikTok Shop US Seller UniversitysecondaryJuly 2026retrieved 2026-07-31

A 50% markup is a 33% margin. This calculator shows both from the same inputs, subtracts the fees that actually come out of a sale, and tells you what you would need to charge to hit a margin you choose.

Methodology

How this calculator works

Margin against markup

Margin is profit divided by the selling price. Markup is profit divided by the cost. They describe the same dollar of profit from two directions and they never produce the same percentage.

A $10 item sold for $15 carries a 50% markup and a 33.3% margin. Someone who wants a 40% margin and applies a 40% markup ends up with a 28.6% margin and a shortfall they will not notice until the year-end accounts. The error always runs one way: markup thinking underprices.

To convert: margin = markup ÷ (1 + markup). To go the other way: markup = margin ÷ (1 − margin).

Why the target price is not cost ÷ 0.7

Getting a 30% margin looks like dividing cost by 0.7. That works only when there are no percentage fees, because raising the price also raises every percentage fee charged on it.

With a 6.5% platform fee and 3% processing, a $24 product needs about $40.60 to reach a 30% margin, not the $34.30 the simple division suggests. The calculator solves for it properly, treating the percentage fees as reducing the share of the price you keep.

Location and data

Where the numbers come from

This calculator does not ask where you live, because the answer is the same in every state: it is arithmetic on the figures you enter and the published figures listed below. That is also why the result reports high confidence — there is no regional estimate in it to be uncertain about.

Nothing you enter is transmitted or stored. The calculation runs entirely in your browser, and the only place your inputs appear is in the page URL, so you can bookmark or share a result if you choose to.

secondaryJuly 2026v2026.07.1
Published seller fee schedules from each platform: Etsy Fees & Payments Policy and Help Center, eBay Selling Fees help pages, Amazon Selling on Amazon fee schedule, Shopify pricing page, TikTok Shop US Seller University
Every platform's fee model is versioned separately and carries its own last-verified date and source link, because they change independently and often. Marketplace fees are the most volatile data on this site — a rate can change with a month's notice — so any result built on them is an estimate of what a payout would be under the rates recorded here, never a guarantee of what a platform will actually pay. Each rate is editable in the calculator. Where a figure could not be confirmed by directly retrieving the platform's page, that is recorded on the platform entry rather than glossed over.

Full detail on every dataset is on the data sources page. Spotted something wrong? Report incorrect data.

Calibration

The judgements behind this estimate

These are the figures we chose rather than measured. For each one we record the range of values found across references, what we selected, and why — because an estimate you cannot interrogate is not much better than a guess. The 1 marked high risk are the ones most likely to be wrong and most consequential when they are.

Published marketplace seller fee rateshigh riskmedium confidence
Observed range
0.06 — 0.45 (typical 0.115)percent of sale and flat fees, varying by platform
Why this value
Each platform's rates are taken from its own published seller fee schedule and stored as a separately versioned model with its own last-verified date and source link. The typical value here is roughly the all-in load on a mid-priced item across the marketplaces; the range spans TikTok's 6% referral fee at one end and Amazon's 45% device-accessory category at the other.
Applies to
US schedules only. Every platform charges differently in other markets.
Known limits
This is the most volatile data on the site and the highest-risk entry in this registry. Rates change with little notice, and category, seller tier, store subscription, promotional period, and region all alter what a seller is actually charged. Every rate is editable in the calculator, every result is labelled an estimate rather than a guaranteed payout, and no platform has verified or endorsed these figures. Quarterly review is the shortest cycle used anywhere on this site and is still not frequent enough to guarantee currency.
Sources
Etsy Fees & Payments Policy and Help Center — confirmed directly; Amazon Selling on Amazon fee schedule — confirmed directly; eBay Selling Fees help pages — page blocks automated retrieval; figures from eBay's own published help content; Shopify pricing page — plan costs confirmed; Shopify Payments card rates were not on the page retrieved; TikTok Shop US Seller University — 6% referral rate, set 1 April 2024
Last verified
2026-07-31 · reviewed quarterly
Online card processing ratemedium confidence
Observed range
0.022 — 0.036 (typical 0.029)percent of transaction plus a flat fee
Why this value
2.9% plus 30 cents is the widely published online rate for small merchants across major processors. Used as the default wherever a platform's own processing rate is not published, notably for Shopify Payments and for selling direct.
Applies to
US card-present and card-not-present rates differ, as do rates for international cards. Only the domestic online rate is modeled.
Known limits
Negotiated rates, interchange-plus pricing, and volume tiers all beat this for larger merchants. The flat component matters far more than the percentage on low-value items, which is why it is exposed as its own field.
Sources
Commonly published small-merchant online rates across major processors; Not taken from any single provider's schedule, and explicitly presented in the calculator as a figure to replace with your own
Last verified
2026-07-31 · reviewed annual

Cost factors

What changes the price most

Product cost: The base. Everything else is a percentage applied on top of, or a subtraction from, the price it supports.
Platform fees: Between nothing and roughly 15% of the sale, and charged on shipping too on most marketplaces.
Payment processing: Around 2.9% plus 30 cents online. The flat portion is what makes low-price items hard to sell profitably.
Shipping: Often the difference between a profitable and an unprofitable product, particularly where free shipping is expected.
Overhead: Invisible per unit and decisive in total. A product with a healthy unit margin can still lose money at low volume.
Returns and chargebacks: Not modeled here. A 5% return rate on a 15% margin removes a third of the profit.

Questions

Frequently asked

What is the difference between margin and markup?

Margin is profit as a percentage of the selling price; markup is profit as a percentage of the cost. A $10 item sold at $15 has a 50% markup and a 33.3% margin. Applying a markup percentage when you meant a margin percentage always underprices, which is why the mistake is so costly.

What is a good profit margin?

It depends entirely on the business. Grocery retail runs on 1% to 3%, general online retail commonly targets 20% to 40%, and software can exceed 80%. The more useful question is whether your margin covers your overhead at the volume you actually sell — a healthy unit margin on too few units is still a loss.

How do I calculate profit margin?

Subtract every cost from the selling price, then divide the result by the selling price. The part people miss is which costs count: platform fees, payment processing, shipping, and packaging all come out of a sale before you see any of it.

How do I price for a 30% margin?

Not by dividing cost by 0.7 — that ignores percentage fees, which rise as the price rises. Divide instead by (1 − margin − fee percentages). With a 6.5% platform fee and 3% processing, a $24 product needs about $40.60 rather than $34.30.

Should overhead be included in profit margin?

For a per-product decision, usually not — you want to know whether the product carries itself. For deciding whether the business works, absolutely, because rent and software are paid whether or not anything sells. This calculator makes it a switch so you can answer either question.