Profit margin calculator

What it works out

• Profit on each sale: what one sale leaves you once fees, materials, shipping and per-order costs are taken out.
• Profit margin: that profit as a share of the price, so two products at different prices can be compared.
• Markup: the same profit as a share of what the sale costs you.
• Profit for the month at the number of sales you choose, once your fixed costs are paid.
• How many sales a month cover your fixed costs, and what that is in revenue.

How to calculate profit margin

Profit margin is the share of each sale you keep after the costs of making that sale. Subtract the costs from the price, divide by the price, and multiply by 100.

Profit margin = (price − costs) ÷ price × 100

Say Rachel sells a candle for $40. Marketplace and payment fees come to $3.66, the candle costs her $12 to make, and shipping is $5.50. She keeps $40 − $3.66 − $12 − $5.50 = $18.84 on each sale, and $18.84 ÷ $40 × 100 = 47.1%. That is the example the calculator above opens on.

That is the margin on each sale, before the costs of running the business each month, such as rent and software. Take those out too and you have your profit for the month: at 150 sales and $2,000 of fixed costs, Rachel's month comes to $826.

What is the difference between margin and markup?

Margin is profit as a share of the price: (price − costs) ÷ price × 100. Markup is profit as a share of the cost: (price − costs) ÷ costs × 100. A $40 item that costs you $20 has a 50% margin and a 100% markup, so the same percentage means a lower margin when you price from markup. The calculator shows both.

What is the difference between gross and net profit margin?

Gross margin takes out the direct costs of each sale: what the product costs you, fees and shipping. Net margin also takes out the costs of running the business, such as rent, software and wages. The calculator shows the first for each sale, and its monthly figure includes your fixed costs.

How do marketplace and payment fees change my margin?

Fees come out of each sale before the money reaches your bank, so they lower your margin like any other cost. The payout from one real sale already has your actual fees taken off, which makes it the quickest way to account for them.

How many sales do I need to cover my costs?

Divide your fixed monthly costs by what you keep on each sale, and round up. With $2,000 of fixed costs and $18.84 kept on each sale, that is 107 sales a month.

Where do my numbers go?

They stay in your browser. No account is needed, and nothing you type is sent to us.

Two ways to tell it what the fees were

A marketplace or a processor pays out the sale minus its cut, so a seller looking at one real settlement already knows the fee exactly. Entering what landed in the bank is the accurate path and needs no rate table.

Entering rates yourself is there for pricing something that has not sold yet, and for working out what a rate change would mean. You bring the rates, because plans get negotiated, grandfathered and priced by category.

Good to know

• Everything you type stays in your browser. No account needed, and nothing is saved.
• Sales tax sits outside these figures. It is collected on top of your price and passed on, so what you see here is yours.
• It is one product on one day. Keeping the totals underneath it current is what Even Margin does with your bank feed.