Margin Calculator
Calculate gross profit margin, profit amount, required selling price, or maximum cost price. Essential for product pricing, ecommerce, and financial planning.
Calculation Mode
Calculate your margin from what you paid and what you charged.
Formula
Gross Margin % = ((Selling Price − Cost) ÷ Selling Price) × 100
Margin is always expressed as a percentage of the selling price. A £50 cost item sold for £80 has a gross profit of £30, which is 37.5% of £80.
Worked Example
Scenario: You buy a product for £42 and want to achieve a 40% gross margin. What must you sell it for?
Mode: Margin + Cost • Cost = £42 • Target margin = 40%
Gross profit = £70 − £42 = £28 • Margin = £28 ÷ £70 = 40%
The equivalent markup on cost is £28 ÷ £42 = 66.7%.
Common Mistakes
- Confusing margin with markup. A 40% markup on a £42 cost gives a £58.80 sell price and only a 28.6% margin — not 40%.
- Including VAT in the selling price. Always use ex-VAT prices. Margin on a VAT-inclusive price will be artificially inflated.
- Ignoring variable costs. Gross margin only deducts cost of goods. Shipping, platform fees, and returns will reduce your true margin further.
How to Use
- 1
Select a calculation mode
Choose based on which two values you already know.
- 2
Enter the known values
Fill in cost price, selling price, or target margin.
- 3
Click Calculate
All output values are computed at once.
- 4
Model scenarios
Adjust cost or selling price to see how margin changes. Useful for pricing decisions.