Margin, Markup & Discount

Calculate product margin, markup, and discount scenarios (USD)

Step 1 · Cost, price, and discount

Unit cost (USD) Your landed cost per unit (COGS) in USD. List price (USD) Selling price before discount or coupon, in USD. Discount / coupon % Percent taken off the list price (0–100%).

Step 2 · Target margin guardrails

Target margin % Optional · margin you want to keep after discount. Calculation scope Platform fees, tax, and shipping are not included unless you add them into cost.

Margin & markup summary

Enter cost, price, and discount · USD

We’ll compute net price after discount, gross margin %, markup %, and how they change with your discount. If you add a target margin, we’ll also solve the required list price and the maximum discount that still hits your goal.

Definitions: Net price = List × (1 − Discount). Margin% = (Net − Cost) ÷ Net. Markup% = (Net − Cost) ÷ Cost. Required list price for a target margin t = Cost ÷ (1 − t) ÷ (1 − Discount). Maximum discount to keep target margin at a fixed list price = 1 − Cost ÷ (Price × (1 − t)). This page works in USD and treats platform fees, shipping, and tax as outside costs unless you include them in cost.

Updated: October 7, 2025

Margin & markup calculator FAQs

Why do margin and markup show different percentages?

Margin divides profit by net price, while markup divides profit by cost. The same dollar spread over two different bases produces two different percentages, which is why “40% margin” is not the same as “40% markup”.

Does the target margin apply before or after discount?

In this calculator, the target margin applies to the after-discount net price. That’s what protects your contribution margin during sales and coupon campaigns.

What if my max discount comes out negative?

A negative max discount means your list price is too low to reach the target margin even with no discount at all. You would need to raise price, lower cost, or relax the target margin to make the math work.

Should I include marketplace fees and taxes in cost?

For margin planning, many teams treat platform fees, payment processing, and mandatory packaging as part of cost. Taxes are often handled separately. If you want a contribution margin view, include all variable costs per unit in the cost field before you calculate.

How to use this margin, markup & discount calculator

1. See margin and markup from the same inputs

Margin and markup describe the same spread from different vantage points. Margin looks forward from selling price: it’s the share of your revenue that remains after cost. Markup looks backward from cost: it’s how much you multiplied cost to reach selling price. If net price is 20 USD and cost is 12 USD, margin is (20 − 12) ÷ 20 = 40%, while markup is (20 − 12) ÷ 12 ≈ 66.7%. The calculator shows both off the same inputs so finance, merchandising, and marketing are all looking at the same underlying numbers.

2. Understand how discounts change your real margin

Discounts squeeze margin faster than they squeeze markup because they push net price down while cost stays fixed. A 10% coupon on a 29 USD list price drops net price to 26.10 USD. If cost is still 12.40 USD, margin becomes (26.10 − 12.40) ÷ 26.10 ≈ 52.5%, and markup becomes (26.10 − 12.40) ÷ 12.40 ≈ 110.5%. Planning promotions from the margin view instead of “percent off” alone keeps you from running “successful” campaigns that quietly erode profitability.

3. Use target margin to set list price or discount limits

The target margin field gives you guardrails. If cost is 18 USD and you want to keep 55% margin during a 15% discount, the required list price is: Cost ÷ (1 − 0.55) ÷ (1 − 0.15) ≈ 46.67 USD. If your actual list sits lower, you know you will dip under target when that promotion runs. Flip the problem around and the calculator can show the maximum discount you can offer at a fixed list price without crossing your margin floor.

4. Use the numbers in briefs, sheets, and guardrail docs

Once you hit “Calculate”, the summary spells out cost, list, discount, net price, margin, markup, target margin, required list price, and max discount in a compact format. Tap “Copy summary” and paste that block straight into a pricing sheet, campaign brief, or Slack message. Over time you can keep a small archive of these summaries as your “promotion guardrails” for affiliates, ads, and newsletters.

5. Keep cost inputs realistic and up to date

For this page to stay honest, make sure your cost includes everything that scales with units sold: product, packaging, duties, and platform or payment fees if they are charged per unit. For marketplaces with changing fee structures, you can either maintain a separate profit calculator that includes those fees explicitly, or add them to cost here. Being precise about what “cost” means is what prevents margin drift between finance spreadsheets, ad dashboards, and creative briefs.

How the margin, markup & discount math is approximated

Let list price be P (USD), cost be C, and discount share be d (for example, 0.10 for a 10% coupon). Net price is Pₙ = P × (1 − d). Margin measures profit as a share of revenue: Margin = (Pₙ − C) ÷ Pₙ. Markup measures the same spread as a share of cost: Markup = (Pₙ − C) ÷ C. When discount is already baked into net price, margin and markup are connected by Markup = Margin ÷ (1 − Margin) and Margin = Markup ÷ (1 + Markup).

To solve list price for a target margin t (as a decimal), we require (P × (1 − d) − C) ÷ (P × (1 − d)) = t. Rearranging gives: P = C ÷ (1 − t) ÷ (1 − d). To find the maximum discount that keeps your target margin at a fixed list price, solve the same equation for d instead. That yields d = 1 − C ÷ (P × (1 − t)). If d is negative, the list price is too low to ever hit the target; if d exceeds 1, your price easily covers the target even without tight discount control.

All outputs are rounded to two decimal places for USD amounts and one decimal place for percentages. The math is per-unit; multi-unit orders scale linearly from this base as long as cost and discount structure stay the same.