> Index of Phersa pages for AI agents: https://phersa.com/llms.txt

# Profit Margin Calculator

Calculate profit margin and markup from your cost and price, or type the margin or markup you want and get the price to charge. For creators and AI persona pages that sell a product, course or e-book on Instagram and Facebook.

## How to use the Profit Margin Calculator

1. Pick what you start from: Cost and price, Target margin or Target markup.

2. Type the cost of one sale, then the price or the percentage you want. Add a number of sales to see the total profit.

3. Read the price, profit per sale, margin and markup side by side.

## Margin and markup are not the same number

Both start from the same profit, price − cost. They divide it by different things:

- **Margin** = profit ÷ price × 100. The share of the price you keep.
- **Markup** = profit ÷ cost × 100. How much you added on top of the cost.

**Worked example, made-up numbers:** a product costs $12 and sells for $30. Profit is $18. Margin is $18 ÷ $30 = 60%. Markup is $18 ÷ $12 = 150%. When there is a profit, markup is always the bigger number. Mix them up and you price too low.

## How to find the price from the margin you want

Price = cost ÷ (1 − target margin). With a $12 cost and a 40% target margin, the price is $12 ÷ 0.6 = $20, and $8 of it is profit.

The common mistake is to add 40% to the cost: $12 × 1.4 = $16.80. That is a 40% markup, and its margin is only $4.80 ÷ $16.80 = 28.6%.

From a markup it is simpler: price = cost × (1 + markup). A margin can only reach 100% when the cost is 0. A markup has no upper limit.

## Markup to margin conversion

Margin = markup ÷ (1 + markup). Markup = margin ÷ (1 − margin). The same profit, written both ways:

| Markup | Margin |
| --- | --- |
| 25% | 20% |
| 50% | 33.3% |
| 100% | 50% |
| 200% | 66.7% |
| 300% | 75% |
| 900% | 90% |

Pay no markup on your images and videos: make them on your own API keys at the providers’ prices, under one monthly plan. [See pricing →](https://phersa.com/pricing)

## Profit Margin Calculator questions

### How do I calculate profit margin?

Profit ÷ price × 100. Take the cost from the price to get the profit, divide the profit by the price, and multiply by 100. A $30 sale that costs $12 leaves $18 profit, a 60% margin.

### What is the difference between margin and markup?

Margin divides the profit by the price. Markup divides it by the cost. The same $18 profit on a $30 sale with a $12 cost is a 60% margin and a 150% markup.

### What is a good profit margin?

One that pays for what each sale doesn’t: your ads, your monthly costs and the profit you want to keep. There is no single good number, so work back from your own costs. Find what your ads cost per sale first, then the margin that covers it.

[Find your break-even ROAS →](https://phersa.com/tools/break-even-roas-calculator)

### What costs should I include?

Everything one sale costs you: making or buying the product, delivery, packaging and payment fees. Leave out ad spend and monthly costs. Check those against your profit per sale and per month.

### Why does markup show a dash for my digital product?

Because a cost of 0 has nothing to divide by. Markup divides the profit by the cost. With no cost, the margin is 100%. Type payment fees or hosting per sale as the cost to get both numbers.

### Is this gross or net margin?

Gross, if you type only the cost of each sale. Net margin also takes off every other expense, like software, ads and taxes on profit.

## More free tools

- [Break-Even ROAS Calculator — Profit per sale, break-even ROAS and the most you can pay in ads per sale, from your price and costs.](https://phersa.com/tools/break-even-roas-calculator)
- [Digital Product Pricing Calculator — What a sale of an ebook, course or template leaves after tax, fees and refunds, and the price for your target.](https://phersa.com/tools/digital-product-pricing-calculator)
- [ROAS Calculator — Return on ad spend from revenue and ad spend, the profit left after ads, and the revenue a target ROAS needs.](https://phersa.com/tools/roas-calculator)

[See all free tools for AI persona creators →](https://phersa.com/tools)

Source: https://phersa.com/tools/profit-margin-calculator