Margin Rate Calculator

The margin rate is the profit (margin) as a percentage of the selling price. Along with the cost rate, it is one of the most used indicators for pricing decisions.

Enter the cost and selling price to calculate both the margin (profit) and the margin rate (%). Useful for setting the right selling price in online stores or retail.

For example, selling a product that costs $70 for $100 gives a margin of $30 and a margin rate of 30%.

Margin Rate Calculator Calculation Method

Margin: $0

Margin rate: 0 %

About This Calculator

Margin rate (profit margin) is the profit on a sale expressed as a percentage of the selling price. It is different from markup, which measures profit against cost, and mixing the two is one of the most common pricing mistakes in retail and e-commerce.

Enter the cost and the selling price to get the profit, the margin rate on the sale price and the markup on cost.

Margin and markup answer different questions, and the gap widens as the numbers grow: a 50 % margin equals a 100 % markup, while a 20 % margin is only a 25 % markup. A retailer who adds a fixed percentage to cost and then reports the resulting margin will always see a smaller number than expected, which is a common source of mispricing.

Key Formula:Margin (%) = (Price − Cost) / Price × 100 ; Markup (%) = (Price − Cost) / Cost × 100

Frequently Asked Questions

What is the difference between margin and markup?

Margin is profit divided by selling price; markup is profit divided by cost. Selling a $100 item that cost $70 is a 30% margin but a 42.9% markup. Margin is what matters for profitability; markup is what you add to cost when pricing.

Is a 30% margin good?

It depends on the sector. Software and services can sustain 60–80% gross margins, while grocery retail often runs below 5%. Compare against your industry's benchmark rather than a single universal target.

What is a healthy gross margin?

It varies enormously by sector: grocery retail runs 2–5 %, apparel 40–60 %, software 70–90 %. What matters is whether the margin covers fixed costs plus the target profit, so comparing margins across industries tells you very little.

How do I turn a 30 % margin target into a price?

Divide the cost by (1 − margin). An item costing 70 sold at a 30 % margin is 70 / 0.7 = 100. Adding 30 % to the cost would give 91 instead, which is only a 23 % margin.

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Sources & last update

2026-10-19