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What you pay per unit, landed and excluding tax.
Set this and the selling price fills in for you.
Type it in, or let the markup above set it.
Margin is profit as a share of your selling price. Markup is the same profit measured against your cost, which is why the two percentages never match. The markup calculator converts between them.
See how Mage helps Shopify brands lift repeat purchase rate with loyalty, referrals and store credit.
Profit margin is your profit expressed as a percentage of your selling price. If you sell an item for $50 that cost you $30, your profit is $20 and your margin is 40%, because $20 is 40% of $50.
Subtract the cost from the selling price to get profit, divide that by the selling price, then multiply by 100. For a $30 cost and a $50 price: ($50 minus $30) divided by $50, times 100, gives a 40% profit margin.
Subtract the cost per item from the selling price. An item costing $12 that sells for $29 makes $17 of profit per unit. Multiply that by units sold to get total gross profit.
They measure the same profit against different bases. Margin divides profit by the selling price; markup divides it by the cost. A product bought at $20 and sold at $30 carries a 33.3% margin and a 50% markup. Margin is always the smaller of the two.
Gross margins of 40% to 60% are common for direct-to-consumer brands, but it varies sharply by category. Electronics and grocery often run 10% to 25%, apparel 50% to 60%, and beauty or supplements can exceed 70%. What matters more is what survives after advertising, shipping and returns.
Gross margin counts only the cost of the product itself, which is what this calculator works out. Net margin also subtracts everything else it takes to run the business: advertising, shipping, payment processing, software, salaries and returns. Net margin is always lower, and is frequently a fraction of gross.
Not automatically. It compares one cost figure against one selling price. To account for shipping, packaging or payment processing fees, add them into the cost per item. Leave sales tax and VAT out entirely, since that money is collected on behalf of the government rather than kept.
A 50% profit margin means half of your selling price is profit, so the item costs you exactly half of what you charge. A $40 product that cost $20 has a 50% margin. In markup terms that is a 100% markup, also known as keystone pricing.
Divide the cost by (1 minus the margin as a decimal). To hit a 45% margin on an item costing $22: $22 divided by 0.55 gives $40. Adding 45% to the cost instead would give $31.90, which is only a 31% margin.
Far more than the headline percentage suggests, because a discount comes straight out of profit. On a 40% margin, a 20% discount removes half your profit on that sale. Check the post-discount margin on your bestsellers before running a sitewide promotion.
Raise prices, lower unit costs by negotiating or ordering in larger volumes, cut discounting, or increase average order value so fixed costs spread further. The cheapest lever is usually repeat purchase: a returning customer carries no acquisition cost, so their orders convert almost entirely to margin.
Yes. No signup, no email, and no limit on how many products you run through it. It is built by Mage Loyalty, a loyalty, referrals and store credit app for Shopify.
Mage is a loyalty, referral and store credit app built for Shopify. Reward repeat purchases, run VIP tiers, and give customers a reason to come back, without writing a line of code.
