Tools / Margin and pricing
Margin and pricing calculator
Margin is profit as a share of the selling price. Markup is profit as a share of the cost. Mixing the two up is one of the most common pricing mistakes.
Margin against markup
Selling price = cost ÷ (1 − margin). A 40% margin needs a 66.7% markup, not 40%.
| Gross margin | Markup needed |
|---|---|
| 20% | 25.0% |
| 30% | 42.9% |
| 40% | 66.7% |
| 50% | 100.0% |
| 60% | 150.0% |
Your margin also sets the return your ads need. Work out your break-even ROAS.