AVAILABLE FOR WEB, FLUTTER & QA PROJECTS
How to use this tool
1. Choose Calculation Mode
Calculate Profit Margin from Cost and Revenue, or find Target Selling Price from Desired Margin.
2. Enter Unit Cost of Goods (COGS)
Input wholesale product cost, manufacturing cost, or contractor labor expense per unit.
3. Input Selling Price or Desired Margin
Enter your customer retail price or specify your target profit percentage.
4. Add Operating Expenses & Fees
Optionally include payment processing fees (e.g. 2.9% + $0.30) and shipping costs to calculate true Net Profit.
Formula or logic used
Margin vs. Markup Mathematics
While margin represents profit as a percentage of total revenue, markup represents profit as a percentage of product cost.
Gross Profit ($): $\text{Gross Profit} = \text{Revenue} - \text{COGS}$Gross Margin (\%): $\text{Margin} = (\frac{\text{Gross Profit}}{\text{Revenue}}) \times 100$Markup (\%): $\text{Markup} = (\frac{\text{Gross Profit}}{\text{COGS}}) \times 100$Selling Price from Margin: $\text{Price} = \frac{\text{COGS}}{1 - (\text{Desired Margin \%} / 100)}$Net Profit ($): $\text{Net Profit} = \text{Gross Profit} - \text{Operating Expenses} - \text{Payment Fees}$
Examples
Example 1: E-Commerce Retail Product
Healthy retail product margins with ample cushion to absorb customer acquisition advertising costs.
Example 2: B2B Software Development Consulting
Calculates the exact billing rate needed to hit gross margin targets after paying engineering labor.
Common use cases
Retail & E-Commerce Catalog Pricing
Establish competitive yet profitable consumer pricing across Shopify, WooCommerce, or Amazon stores.
Stripe & PayPal Fee Absorptive Analysis
Ensure merchant gateway transaction fees do not erode bottom-line net profits on low-ticket items.
Wholesale to Distributor Discounting
Calculate maximum volume discounts your business can grant distributors while preserving positive margins.
Agency & Freelance Rate Setting
Determine hourly bill rates for subcontractors and employees to maintain firm profitability.
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Frequently asked questions
What is the crucial difference between Margin and Markup?
Margin is profit divided by Selling Price (what portion of revenue you keep), whereas Markup is profit divided by Cost (how much you mark up your cost). For example, a $50 cost sold for $100 has a 50% margin but a 100% markup.
Can profit margin ever exceed 100%?
No, profit margin cannot exceed 100% because profit cannot be greater than total revenue. However, markup can easily exceed 100%, 200%, or even 1000%.
What is a good gross profit margin for an e-commerce business?
Most direct-to-consumer (DTC) e-commerce brands target gross margins between 50% and 70% to ensure enough gross profit remains after paying digital advertising (Meta/Google Ads) and shipping costs.
How do payment gateway fees affect my net margin?
Credit card processors typically charge 2.9% + $0.30 per transaction. On a $10 purchase, that fee is $0.59 (nearly 6% of revenue), which significantly reduces net profit margins on micro-transactions.
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