How do I calculate price from a target margin?

price = cost / (1 - margin as a decimal). A 40% margin on a $60 cost gives a $100 price.

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Margin & markup calculator

Enter your cost and a target margin to get the price — or enter a price to see your margin and markup. Instant, no sign-up.

Cost ($)

Margin (%)

Sell price ($)

Markup

66.7%

Profit / unit

$40.00

Margin is profit as a % of the price. Markup is profit as a % of the cost. They are not the same number.

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Margin vs markup — what's the difference?

Gross margin is your profit as a percentage of the selling price: (price − cost) ÷ price. A $100 item that costs $60 has a $40 profit and a 40% margin.

Markup is your profit as a percentage of the cost: (price − cost) ÷ cost. That same item has a 66.7% markup. Same dollars, different denominator — which is why a "40% margin" and a "40% markup" give very different prices.

To price from a target margin: price = cost ÷ (1 − margin%). To price from a markup: price = cost × (1 + markup%). In SimpliQuote, you set a margin or markup per line and the price is calculated for you automatically.

FAQ

Questions, answered

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 $100 item costing $60 has a 40% margin but a 66.7% markup.

How do I calculate price from margin?

Divide the cost by (1 minus the margin as a decimal): price = cost / (1 - margin%). For a 40% margin on a $60 cost, price = 60 / 0.6 = $100.

How do I calculate markup?

Markup = (price - cost) / cost, shown as a percentage. To price from a markup: price = cost x (1 + markup%).

Stop calculating margin by hand

In SimpliQuote you set a target margin or markup per line and the price is worked out for you — with cost and margin visible only to your team. 7-day free trial.

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