If my cost is $40 and I want a 40% margin, what should I charge?

You should charge $66.67 (calculated as $40 / (1 - 0.40)). This requires a 66.67% markup on cost.

Updated: August 2026 • Verified v1.2

Gross Margin vs Markup Pricing Calculator

Finance & MathPopular

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Price = Cost / (1 - Margin%); Margin% = Profit / Revenue; Markup% = Profit / Cost

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Understanding Your Results

Calculates retail selling price, dollar gross profit, gross margin %, and cost markup % from any two given variables.

Practical Guidance & Next Steps

Remember: A 50% markup on cost only yields a 33.3% gross margin. To achieve a 50% gross margin, you must use a 100% markup.

What is this?

A business pricing utility that solves for selling price, gross profit, margin %, and markup % to ensure profitable pricing.

How does it work?

1. Enter item unit cost (COGS). 2. Enter target Gross Margin % or Markup % on cost. 3. View optimal selling price, dollar profit, and conversion matrix.

Why use it?

Eliminates pricing confusion that causes business owners to undercharge and lose profit.

Technical Scope & Calculation Limitations

Calculates gross profitability before overhead/fixed operating expenses.

Frequently Asked Questions

Gross Margin is profit expressed as a percentage of the selling price (Revenue). Markup is profit expressed as a percentage of the initial cost (COGS).

Windows Desktop & Widget Options