Profit, margin, and markup
Profit per unit is selling price minus cost. Profit margin compares that profit with the selling price, while markup compares it with the cost. Because the denominators differ, a 50% markup does not mean a 50% margin.
How profit margin is calculated
Margin percentage equals profit divided by selling price, multiplied by 100. A positive margin means the selling price is above the entered cost; a negative margin means it is below that cost.
How markup is calculated
Markup percentage equals profit divided by cost, multiplied by 100. If cost is exactly zero, markup is undefined because division by zero has no finite percentage result; the calculator reports that explicitly instead of inventing a value.
Using quantity for totals
Quantity scales the per-unit numbers into total revenue, total cost, and total profit. It does not change the margin or markup percentages because both percentages are based on the same unit economics.
What to include in cost
The result only reflects the cost you enter. Depending on your use case, a meaningful cost may need to include purchase cost, materials, packaging, commissions, shipping, or allocated overhead. This calculator does not decide which accounting definition is appropriate for your business.
Frequently asked questions
Can margin be negative?
Yes. If selling price is lower than the entered cost, the unit profit and margin are negative.
Why is markup undefined when cost is zero?
Markup divides profit by cost. A zero cost makes that ratio undefined.
Does this include taxes or fees?
Only if you deliberately include them in the cost or selling price values you enter.