Profit margin calculator: margin, markup and multiplier
Enter your unit cost and selling price: gross profit, gross margin, markup, multiplier and net profit after delivery and ads appear instantly. No sign-up.
Calculate your profit margin, markup and multiplier
Gross profit is the selling price excluding tax minus the unit cost. Gross margin expresses it as a share of the selling price, markup as a share of the cost, and the multiplier is the selling price divided by the cost. With a cost of 10 and a price of 40, gross profit is 30, gross margin 75%, markup 300% and the multiplier 4.
Profit margin, markup and multiplier: definitions
**Gross profit** is what you earn on one unit before your other costs: selling price excluding tax − unit cost. **Gross margin** expresses that profit as a percentage of the selling price; **markup** expresses it as a percentage of the cost. Both describe the same profit, but never give the same percentage.
With cash on delivery, gross profit isn’t enough: delivery, packaging and ad cost per order are added to every sale. The “variable costs per sale” field gives **net profit per sale**, closer to what you actually keep.
Profit margin formulas
All amounts exclude tax and use the same currency.
| Result | Formula | Example (cost 10, price 40) |
|---|---|---|
| Gross profit | selling price − unit cost | 40 − 10 = 30 |
| Markup | profit ÷ unit cost × 100 | 30 ÷ 10 = 300% |
| Gross margin | profit ÷ selling price × 100 | 30 ÷ 40 = 75% |
| Multiplier | selling price ÷ unit cost | 40 ÷ 10 = 4 |
| Price including tax | selling price × (1 + tax rate) | 40 × 1.20 = 48 with 20% VAT |
| Net profit per sale | profit − variable costs per sale | 30 − 12 = 18 |
| Net margin | net profit ÷ selling price × 100 | 18 ÷ 40 = 45% |
If the unit cost or selling price is 0, rates that divide by it show 0.
Converting markup into gross margin
Gross margin = markup ÷ (1 + markup). A few reference points:
| Markup | Gross margin | Multiplier |
|---|---|---|
| 25% | 20% | 1.25 |
| 50% | 33.33% | 1.5 |
| 100% | 50% | 2 |
| 300% | 75% | 4 |
What margin should you aim for with cash on delivery?
There’s no universal rate: it depends on your delivery cost, your ad cost per order and your confirmation and delivery rates. A useful rule: check that net profit stays positive **per delivered order**, allowing for refused parcels.
- Enter delivery and your ad cost per delivered order as variable costs.
- If net profit is thin, test a 2- or 3-item bundle: the delivery cost is shared.
- To include returns and unconfirmed leads, then use the COD profit calculator.
Profit margin frequently asked questions
How do you calculate profit margin?
Subtract the unit cost from the selling price excluding tax, then divide by the selling price: a product bought for 10 and sold for 40 makes 30 of gross profit, a 75% gross margin. For net profit per sale, also subtract variable costs such as delivery, packaging and ad cost per order.
What is the difference between margin and markup?
Margin divides profit by the selling price; markup divides it by the cost. With 30 of profit on a cost of 10 and a price of 40, gross margin is 75% and markup is 300%.
How do I set a price from a target margin?
Divide the unit cost by (1 − target margin). For a cost of 10 and a 60% target margin, the selling price excluding tax is 10 ÷ 0.40 = 25.
What is a pricing multiplier?
It’s the number you multiply the unit cost by to get the selling price excluding tax. A multiplier of 4 means a product bought for 10 sells for 40. It’s a quick way to price a catalog.
Should margin be calculated excluding tax?
Yes: the VAT or sales tax you collect isn’t yours, it’s paid to the state. Calculate margin on the price excluding tax and use the price including tax only for display to customers, following your country’s rules.
Keep exploring
COD profit calculator
Free calculator: net profit, cost per delivered order, break-even lead cost and minimum price of a COD offer.
Learn moreROAS calculator
Free calculator: real ROAS on delivered orders, break-even ROAS, CPA and maximum CPA for cash on delivery.
Learn moreBundles and upsells
Per-product bundles, discounts, free delivery and complementary products offered inside the order form.
Learn more
A good margin sells better with a good offer.
Create your COD store: bundles, complementary products and a built-in profitability calculator.