Profit margin calculator: margin, markup and the price that hits your target.
Enter an item's cost and sale price to see profit, margin and markup, or enter the cost and the margin you want to get the price, rounded up to 250, 1,000, 1 or 0.05. The maths runs in your browser; nothing is sent anywhere. Dashing does this automatically for every item from the real purchase cost of each receipt.
Margin is not markup
Gross margin is profit divided by the sale price; markup is profit divided by cost. An item that costs 2,000 and sells for 2,500 makes 500: a 20% margin, a 25% markup. When a supplier says "put 30% on top", that is markup, and your real margin is lower — 23%. Mixing the two is the most common pricing mistake in shops.
The formulas, with a worked example
Profit = price − cost. Gross margin = profit ÷ price × 100. Markup = profit ÷ cost × 100. The price for a target margin = cost ÷ (1 − margin ÷ 100). An item that costs 2,000 with a target margin of 30% must sell for 2,000 ÷ 0.7 = 2,857.14, which rounds up to 3,000 at a step of 250. At that price the margin is 33.3% and the markup 50%.
Margin to markup at a glance
A 20% margin is a 25% markup; 25% is 33.3%; 30% is 42.9%; 40% is 66.7%; 50% is 100%. To convert yourself: markup = margin ÷ (100 − margin) × 100, and margin = markup ÷ (100 + markup) × 100.
Rounding the price up
Choose the step your prices move in: 250 in Iraq, where it is the smallest note that actually circulates, 1,000 for larger dinar prices, 1 for whole units of most currencies, or 0.05 for prices in cents. Suggested prices are always rounded up, so rounding never eats the margin you just computed.
The real cost changes with every purchase
The cost you type here is one number. In a real shop the purchase price changes from one delivery to the next, and the correct cost is the weighted average of what you actually hold. Dashing updates every item's cost with each purchase receipt and computes real profit on the income statement from that cost, not from a number typed once.
When the supplier raises the price
Enter the increase and see your new margin if the sale price stays, and the price that keeps your margin, rounded up to your step. Copy a link to the calculation to send to a partner: the numbers open for them as you left them.
Common questions
What is the formula for profit margin?
Gross margin = (price − cost) ÷ price × 100. An item bought for 60 and sold for 100 has a 40% margin and a 66.7% markup.
What is a reasonable margin for a retail shop?
It depends on the trade: grocery and food work on small margins over large volumes; clothing and accessories on higher ones. What matters is knowing each item's margin — not the shop's average — because losing items hide behind winning ones.
Does margin include expenses?
No. This is gross margin: price minus the item's cost only. Rent, electricity and wages come off after it, and what remains is net profit — which is what the income statement shows.