Margin Calculator

A price margin calculator is a tool used to determine the selling price of a product or service, given its cost and the desired profit margin. Calculating the price margin typically involves adding a certain percentage of profit to the cost of the product.

The Revenue, Cost, or Margin can be accurately determined by selecting and locking the desired variable in the calculation feature.

The formula for calculating the price margin

For example, if the cost of a product is $50 and you want a profit margin of 20%, the selling price would be calculated as follows:

Margin vs. markup

Markup and margin are both commonly used terms in finance and business, particularly in pricing strategies, but they refer to different concepts. Understanding the difference between them is important for setting prices effectively and managing profitability.

Markup, calculated from the cost price, is the percentage increase applied to the cost to establish the selling price. It's essential for covering costs and securing profit. In contrast, Margin, derived from the selling price, represents the profit percentage made from each sale, highlighting profitability.

Essentially, markup guides price setting, while margin reveals earnings. Despite similar roles in pricing, their basis—cost for markup, selling price for margin—and resultant percentages differ, making them distinct yet interconnected financial tools.