Margin Calculator — Selling Price
The target-margin view, solving the question pricing meetings actually ask: what do we have to charge to make X%? It divides cost by one minus the target margin — so a $60 cost priced for a 40% margin needs exactly $100 — and refuses impossible targets of 100% or more instead of returning a bogus number. Useful whenever the margin is fixed by policy and the price is the unknown.
Margin & markup
Selling price
$100.00
$40.00 profit · 40% margin · 66.67% markup
Breakdown
Margin is profit ÷ price; markup is profit ÷ cost — the same sale, two different percentages. Plain arithmetic on the numbers you enter; not pricing, tax, or accounting advice.
Solving price from the margin you need
The formula is price = cost ÷ (1 − margin). It grows non-linearly: a $60 cost needs $80 for a 25% margin, $100 for 40%, $120 for 50%, and $240 for 75%. Each step up in margin costs the customer proportionally more than the last, which is why high-margin targets quietly price products out of their market and why the curve is worth seeing before committing to a policy number.
The right target margin is a cost-structure question: it must cover operating expenses, payment fees, returns, and discounts with profit left over. Work backwards from those — if overheads eat 30 points of revenue, a 40% gross margin leaves 10 points of operating profit, while a 25% target leaves losses.
Questions
- What price gives a 40% margin on a $60 cost?
- $100. The formula is cost ÷ (1 − 0.40) = 60 ÷ 0.6. That same price is a 66.67% markup on cost.
- Why does a 100% target margin return no price?
- Because price = cost ÷ (1 − margin) divides by zero at 100%. No finite price makes the profit equal the entire price while the cost is above zero; think in markup if you want profit to exceed cost.