How do I find profit margin?

Updated October 2026 · How we answer

Margin versus markup

Profit margin measures profit as a share of the sale price. Markup measures profit as a share of cost. Both use the same profit number, but they divide by different totals, so the percentages are not the same. Use margin when you want to know how much of each sale you keep.

A flip with a 50 percent markup has a margin of about 33.3 percent, because the sale price is larger than the cost. Mixing the two up leads to pricing mistakes, so label which one you are using in your notes.

• Margin equals profit divided by sale price, times 100
• Markup equals profit divided by cost, times 100
• Gross margin counts only direct costs; net margin includes all costs
• Compare margins across items using the same cost rules

Working through an example

Say you buy a vintage lamp for $12, clean it, and sell it for $45 after spending $8 on shipping and packing. Your total cost is $20 and your revenue is $45, so profit is $25 and your margin is about 55.6 percent.

Add platform fees to the cost side if you sell online. A margin estimate that ignores fees will look higher than the money you actually keep.

Using margin to set prices

Set a target margin before you buy. If you want a 40 percent margin and fees take 15 percent of the sale price, you need enough room in the price to cover both. Revisit your target as costs and market prices change.

From our shops