Free tool
Profit Margin Calculator
Find the gross profit margin and markup of any product from its selling price and cost. Enter the two figures below to see your profit per unit, margin, and markup in one go.
Disclaimer: Results are estimations based on the values you enter. Actual profit margins may be subject to additional variables such as fees, returns, and channel costs not reflected in this calculator. Consulterce accepts no liability for the accuracy of the displayed results or any financial losses incurred as a result of their use.
What is profit margin?
Gross profit margin is the share of a product’s selling price that remains as profit after you subtract its cost. It is expressed as a percentage of the selling price, which makes it easy to compare products at different price points.
Margin is the cleanest way to judge whether a product earns its place in your assortment, and it is the starting point for any conversation about pricing or cost increases with Amazon.
The profit margin formula
Profit Margin = ((Selling Price – Cost) ÷ Selling Price) × 100
For example, a product sold at $20 that costs $12 has a margin of (($20 - $12) / $20) × 100 = 40%.
Margin vs markup
Margin and markup both describe the gap between cost and price, but against different bases. Margin is the profit as a percentage of the selling price; markup is the same profit as a percentage of the cost.
Markup = ((Selling Price – Cost) ÷ Cost) × 100
The $20 product above carries a 40% margin but a (($20 - $12) / $12) × 100 = 66.7% markup. Mixing the two is one of the most common pricing mistakes, so always be clear which base you mean.
Why margin matters for Amazon vendors
On Amazon, your product margin sets the ceiling for everything else: the trade terms you can fund, the advertising you can sustain, and the cost increases you can absorb. A healthy margin gives you room to negotiate; a thin one leaves you exposed every time Amazon asks for more.
Want to protect your product margins?
If you want an independent view on your pricing and where margin is leaking across your portfolio, get in touch. I provide industry-leading advisory services for Amazon vendors just like you.