Margin Calculator
Enter cost and selling price — get gross margin %, gross profit, and the equivalent markup %. Or reverse it: enter a target margin and cost to find the selling price you need to charge. Example: cost £40, sell £100 = 60% gross margin = 150% markup.
Enter cost and selling price — get gross margin %, gross profit, and the equivalent markup. Or work backwards: enter a target margin to find the required sell price.
Calculate your margin from what you paid and what you charged.
After calculating, copy the result into your workflow instead of searching for the calculator again.
Calculate first, then reuse the result
After you calculate, UtilityPilot can turn the result into a clean note you can paste into your SOP, spreadsheet, CRM, Slack, Notion, checklist or email.
Plain-English result — paste into any tool
For internal process notes
For client-ready wording
For Notion, docs or wikis
Share the tool without your values
No sign-up · No stored inputs · Copied text does not include your entered values
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 1 — Finding required selling price:
You buy a product for £42 and need a 40% gross margin. What must you sell it for?
Mode: Margin + Cost • Cost = £42 • Target = 40%
Sell Price = £42 ÷ (1 − 0.40) = £42 ÷ 0.60 = £70.00
Gross profit = £70 − £42 = £28 • Margin check: £28 ÷ £70 = 40%
Equivalent markup: £28 ÷ £42 = 66.7% — not the same as the 40% margin.
Scenario 2 — Ecommerce landed cost:
An Amazon seller pays £18 product cost + £4.50 Amazon fee + £2.50 shipping = £25 total cost. The sell price is £38. What is the gross margin?
Mode: Cost + Revenue • Cost = £25 • Revenue = £38
Profit = £38 − £25 = £13
Margin = £13 ÷ £38 = 34.2% • Markup = £13 ÷ £25 = 52.0%
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.
Guide
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.
Next Steps
What to do next
Add VAT to your selling price
Once you have a sell price, calculate the gross (inc-VAT) total for your invoice.
Calculate markup instead
Start from a cost and target markup % — get the sell price and equivalent margin.
Factor in shipping cost
Calculate CBM shipping volume to include freight in your landed cost.
FAQ
Frequently Asked Questions
Related by Workflow
Related by Region
When to use this calculator
- →Checking the gross margin on a product before quoting or listing it
- →Finding the sell price that achieves a target margin percentage
- →Verifying that a cost price still works at your required margin
- →Ecommerce pricing, B2B quoting, and distributor pricing checks
Example calculation
Inputs: Cost £40 · Sell price £100
Gross profit: £100 − £40 = £60
Margin: £60 ÷ £100 = 60%
Equivalent markup: £60 ÷ £40 = 150%
Margin is profit as a percentage of sell price. Markup is profit as a percentage of cost. Both measure profitability but from different bases.
Limitations
This calculator computes gross margin — revenue minus cost of goods sold, expressed as a percentage of sell price. It does not account for operating expenses, overhead, or tax. The gross margin figure is not the same as net profit margin or operating margin. For imported goods, use the landed cost as your input cost rather than the factory price alone. These results are for pricing and planning purposes only — not financial or accounting advice.
Related calculators
Common calculations
How do I calculate gross margin from cost and selling price?
Gross margin = (Sell price − Cost) ÷ Sell price × 100. Example: cost £40, sell £100 → (£100 − £40) ÷ £100 = 60% margin. Use the calculator above — enter both prices and click Calculate.
How do I find the selling price for a target margin?
Rearranging the formula: Sell price = Cost ÷ (1 − margin%). For a 60% margin on a £40 cost: £40 ÷ (1 − 0.60) = £40 ÷ 0.40 = £100. Use "Find sell price" mode in the calculator above.
What is the difference between margin and markup?
Margin is profit as a percentage of selling price. Markup is profit as a percentage of cost. They are not the same number: a 60% margin = 150% markup; a 50% margin = 100% markup. Using the wrong one leads to under-pricing. The calculator shows both for every result.
Should I calculate margin on the net or gross (VAT-inclusive) price?
Always calculate margin on the net (ex-VAT) sell price. Adding VAT increases the gross price but does not affect your actual margin — VAT collected is passed to HMRC. Use the Margin Calculator with net prices, then add VAT separately.
How do I factor shipping cost into margin?
Add freight cost to your landed cost before calculating margin. If a product costs £40 to produce and £5 to ship to your warehouse, your true cost is £45. Margin at £100 sell price = (£100 − £45) ÷ £100 = 55%. Use the CBM Calculator to estimate freight volume, then include the per-unit freight in your cost.
Next Steps
Next steps after calculating margin
Use this calculator again?
Open UtilityPilot App to pin this tool and return in one click.