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Real-world workflow

Use Case

Price a Product With a Target Margin

Turn a unit cost and a target margin percentage into a selling price — and see the markup you actually applied.

16 August 2026 By Tools.Town Team 5 min read

Steps

  1. Open the Margin & Markup Calculator.
  2. Enter your unit cost (include landed costs — shipping, duty, packaging).
  3. Choose Target margin % mode and enter the margin (e.g. 40).
  4. Read the selling price, profit per unit, and the equivalent markup %.
  5. Planning a promotion? Re-check the discounted price with the Discount Calculator — a 20% discount on a 40%-margin product halves your profit.
  6. Selling in the US? Add tax on top at checkout with the Sales Tax Calculator — tax is charged on the price, not absorbed into the margin.

Watch out

  • A 40% margin requires dividing cost by 0.6 — not multiplying by 1.4. The calculator handles this, but spreadsheets often get it wrong.
  • Margin targets above ~90% produce extreme prices; that usually means the target was actually a markup.

Frequently Asked Questions

Margin or markup for this job?

If your target is a share of revenue (like a 40% gross margin), use margin mode. If your target is cost-plus (like keystone 100%), use markup mode. The calculator shows both so you can sanity-check either way.