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Profit margin calculator
Profit margin is the share of the selling price you keep: (Selling price − Cost) ÷ Selling price × 100. Markup divides the same profit by cost instead. Sell something that costs ₺90 for ₺225 and you keep ₺135: a 60% margin and a 150% markup. To price from a target margin, divide cost by (1 − margin): ₺90 ÷ 0.40 = ₺225.
Calculator
Result
Profit marginThe share of the price you keep
- Profit per item
- Markup
It opened with example numbers; type your own and the result changes at once. Nothing is saved.
How it's worked out
(Selling price − Cost) ÷ Selling price × 100
(Selling price − Cost) ÷ Cost × 100
Cost ÷ (1 − Target margin)
How to use it
- Pick what you know: “I know my price” if you already have one, “I know my target margin” if you want a price worked out.
- Enter what one item costs you, packaging and labels included, at today's buying prices.
- Enter the selling price or the target margin, excluding VAT.
- Read profit per item, margin and markup side by side; with “I know my target margin” you also get the price to charge.
- Round that price up, then check the margin at the rounded figure with “I know my price”.
Watch out
- A 60% markup isn't a 60% margin: sell a ₺90 item for ₺144 and you keep only 37.5%.
- Your cost has to be complete: if you're not sure what one item costs you, work it out first with the recipe cost calculator.
- Leave VAT out of both numbers; a margin worked out on a VAT-inclusive price looks higher than it is.
- Gross margin isn't what you take home; see whether it covers rent and bills with the break-even calculator.
Frequently asked questions
What profit margin should I aim for?
No single figure fits every business; it depends on your rent, how many you sell and the work in each item. In food and drink, a common rule of thumb keeps ingredient cost at roughly 25–35% of the price, a gross margin of about 65–75%. Goods you buy in and resell usually carry less. Treat any rule as a starting point; the real test is whether your margin covers fixed costs and still leaves a profit.
How do I convert markup to margin?
Margin = Markup ÷ (1 + Markup). A 100% markup, which doubles your cost, is a 50% margin; 150% is 60%, and 200% is 66.7%. To go the other way, Markup = Margin ÷ (1 − Margin): a 60% margin needs 0.60 ÷ 0.40 = 1.5, a 150% markup. Turn percentages into decimals before you divide, so 60% becomes 0.60.
How much does a discount cut my profit?
More than the discount itself, because the whole cut comes out of your profit. On an item that costs ₺90 and sells for ₺225, a 10% discount takes the price to ₺202.50; profit per item falls from ₺135 to ₺112.50 and the margin from 60% to 55.6%. To make the same total profit, you'd have to sell 20% more. Run the discounted price through the calculator before the offer starts.
What's the most an item can cost me if the market sets the price?
Multiply the selling price by (1 − target margin). If mugs like yours sell for ₺250 locally and you want a 60% margin, yours can cost at most ₺250 × 0.40 = ₺100 to make. If it costs more, you have three routes: save on materials and packaging, make it worth a higher price, or accept a lower margin knowingly.
More tools
- Price increase calculatorWork out a supplier's price rise, what it adds to one product's cost, and the new selling price that protects your margin.
- Unit cost calculatorEnter the total and the quantity to get your cost per kg, gram, litre, metre or piece, by the case or the sack too.
- Recipe cost calculatorEnter your ingredients line by line to see the cost of the batch, of each slice or portion, and the price for your target margin.
- Break-even calculatorSee how many sales, or how many active members, it takes to cover your rent, bills and staff, per month and per day.
- Waste calculatorFind the share of what you made that was thrown away, spoiled or cut off, value it at cost, and see what it adds up to in a month.
- No-show cost calculatorWork out your no-show rate and what missed appointments cost you each week, month and year, and what one more customer a week is worth.
- Class pack price calculatorSee what an 8-class or unlimited pack works out at per class, and how much of that goes to the instructor and how much stays with the studio.
Have a good day at work!
Çetele puts each product's sales, cost and margin side by side, updates the margin by itself when an ingredient goes up, and keeps loss-makers on the list.