Profit margin calculator: questions and guides
Each guide here answers one question with a practical example, then takes you to the tool to try it yourself. Guides: 29.
Questions
- Profit margin vs markup: the difference that costs sellers moneyProfit margin and markup are not the same, and mixing them up makes you sell for less than you think. Explained with worked numbers.
- How do I work out my margin on stock I import from China once freight and customs are added?The supplier price is not your cost. Work out the landed cost per unit after freight, customs and clearance, and see how it changes your real margin.
- Why does the calculator show a negative margin, and what does it mean for my product?A negative margin means you are selling below cost. What the loss, the negative margin and the negative markup each tell you, with worked numbers.
- What is the biggest discount I can give before I start losing money?Your current margin is exactly the largest discount you can take off the selling price before profit hits zero. Worked numbers, and why markup is the wrong limit.
- I sell at double my cost, so why is my margin 50% and not 100%?Doubling your cost is a 100% markup and only a 50% margin. Why margin can never reach 100%, and what price a real 60% or 70% margin needs.
- How do I calculate my margin on a client project when I pay a subcontractor to do part of it?How to see what you really keep from a client project when someone else does part of the work: what counts as cost, and what unpaid revisions do to your margin.
- Why does the calculator say markup is undefined for my digital product?A zero-cost e-book or template makes markup undefined because it divides by zero. What that means, why margin still works, and what cost to enter instead.
- Do I make more selling two products as a bundle or each one on its own?Compare the margin of a two-product bundle at one price with each product sold alone, and see when a bundle truly pays and when it hands out an unneeded discount.
- I add a free gift to every order; why won't the calculator give me a margin for it?A selling price of zero makes margin undefined, because it divides by zero. The right way to see what a free gift does to the profit of the product it ships with.
- My courier charges a cash-on-delivery fee per order; how do I see what it does to my margin?A fixed COD fee per order eats far more of the margin on cheap products than on expensive ones. How to measure it with your own numbers, and when to push prepaid.
- How do I find my real margin on Noon using the commission shown on my statement?Skip generic fee tables. Take the commission and fees deducted on one order from your Noon statement, add them to cost, and see the margin you actually keep.
- How do I work out my Amazon.sa margin from the fees in my settlement report?Turn referral, fulfilment and storage fees from your settlement report into a per-unit cost, find each product's real margin, and see why slow sellers earn less.
- Is a 60% margin product better than a 25% margin one that earns more money per sale?A cheap product with a high margin can earn you less than a pricey one with a modest margin. How to weigh percentage against profit in money, and what really decides it.
- What is my margin selling the same product wholesale to shops versus retail in my own store?One product, two prices: wholesale to shops and retail online. Compare both margins after each order's own costs, and see when the thinner wholesale margin pays.
- My margin looks higher than reality; is it because I enter the price with VAT included?Entering a VAT-inclusive selling price inflates profit and margin, because the tax is not yours. How to extract the net price first and see your true margin.
- I buy from a supplier in US dollars and sell in dirhams; how do I calculate my margin correctly?The currency picker is display-only and converts nothing, so cost and price must be in one currency. How to convert a dollar cost at the rate you actually paid.
- How much can I spend on ads per order and still make a profit?Your profit per unit before ads is the most you can pay to win one order without a loss. How to find that ceiling and what margin is left after your real ad cost.
- The calculator says I make 30% but the money reaching my bank is far less; what am I missing?The calculator compares one product's cost and price. A checklist of what sits outside that (fees, shipping, returns, ads, VAT) and how to add it to see your real margin.
- If I sell one product at a loss to attract customers, how do I know whether add-on sales cover it?A loss leader sells below cost on purpose, hoping buyers add a profitable item. How to size the loss, the add-on's profit and the share of buyers you need.
- Does pricing at 99 instead of 100 really change my margin?One unit off the price looks harmless, but all of it comes out of profit. When it barely matters, when it takes a tenth of your profit, and how many extra sales repay it.
- Is it safe to type my supplier costs into an online margin calculator?Your buying prices are some of your most sensitive data. What happens to the numbers you type into this margin calculator, and how to check they never leave your device.
- My supplier promised 40% profit at the recommended retail price; why does the calculator show less?When a distributor says 'you make 40%', they may mean markup on your cost, not margin on the retail price. How to check the offer and what to ask before you sign.
- I sell perfume and oud in small decant bottles; how do I calculate the margin per bottle?From the full bottle's price to the cost of each small decant: cost per ml, the empty bottle and label, loss while decanting, then the margin for each size you sell.
- I buy by the carton and sell by the piece; how do I calculate the margin?Margin compares the cost of one unit with the price of one unit. How to turn a carton price into a per-piece cost, and why to divide by sellable pieces only.
- How do I account for returns when I calculate my margin?Returns cost you shipping, handling and sometimes a product you cannot resell. How to spread that cost over the sales you kept, and what it does to your margin.
- Which costs belong in the cost field: just the purchase price, or packaging and rent too?The cost field is for expenses that repeat with every unit you sell, not rent or subscriptions. A simple rule to tell them apart, and what packaging does to margin.
- If I run a 25% White Friday sale, how much margin do I have left?A discount comes straight out of profit, so 25% off can take more than half of what you make per unit. Find your sale-price margin and how many extra sales you need.
- My supplier raised prices by 10%; how much does my margin drop if I keep my selling price?A 10% rise in cost is not a 10% cut in profit. See how much a supplier increase takes from your margin, and which price restores the margin or keeps profit per unit.
- Can I use the margin calculator for a whole month's sales instead of one product?The formula does not care whether the numbers are for one item or a month. Get your store's gross margin from cost of goods sold and total sales.