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Cost Price From Margin Calculator

Work out cost price from margin instantly with clear inputs, formula shown and shareable results.

About Cost Price From Margin Calculator

Working backwards from a known price and margin gives you the maximum cost you can pay a supplier and still hit the margin target. It is the standard sourcing calculation for retail buyers and for anyone negotiating a landed cost.

Formulas

Cost price

Cost = Price x (1 - Margin %)

Cost ratio

Cost % of price = 100 - Margin %

Worked example

With the default values below, Cost Price From Margin Calculator returns Implied cost price of $72.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Selling price
120
Gross margin achieved
40

Results

Implied cost price
$72.00
Gross profit per unit
$48.00
Markup on cost
66.67%
Cost as % of price
60.00%

Step by step

  1. 1Values used
  2. 2Cost price
  3. 3Cost ratio
  4. 4Implied cost price= 72.00
  5. 5Gross profit per unit= 48.00
  6. 6Markup on cost= 66.67
  7. 7Cost as % of price= 60.00

Assumptions and limits

  • The result is derived only from the 2 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

Does this include freight and duty?

Only if you treat the result as a landed cost. Deduct inbound freight, duty and handling from it to get the maximum ex-works price you can accept.

What if margin is quoted on cost?

Then it is a markup, not a margin: divide the price by (1 + markup) instead.

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