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Reference / explanation

Understand target margin and rounding

Version 1.5 · Updated · View changes

Margin is the profit share of the selling price.

Screenshots use sample data. Your prices, license level and settings may differ.

When to use this reference

Use this reference when interpreting the target margin, rounded price and displayed profit.

Key concepts

  • Enter a Target profit margin in Pricing. Margin differs from markup: a 40% margin means 40% of the selling price remains after the calculated cost.
  • Choose no rounding, nearest whole dollar, round up or round down.
  • Review the displayed margin as well as the price. Rounding can change the actual margin.
    Compare the displayed profit margin, price per piece and quote total after changing margin or rounding.
    Compare the displayed profit margin, price per piece and quote total after changing margin or rounding. Open full size
  • Internal cost and profit figures are for your review; the quote PDF contains customer pricing.

How to interpret the result

Read the displayed actual margin after rounding. Margin measures profit as a share of the selling price, so it differs from a markup on cost.

Limits and assumptions

  • The result depends on the entered costs, quantities and failure assumptions.
  • Rounding can move the actual margin away from the target.

Related help

Use the related workflow guides or create a support ticket if a result does not match the entered assumptions.

Workflow at a glance

Set printer costs and filament use, enter the quote, then review costs and margin. Revise the quote if needed before saving or exporting the quote.

Set printer costs and filament use, enter the quote, then review costs and margin. Revise the quote if needed before saving or exporting the quote.
From setup to customer quote · Open full size

Formulas and worked examples

All amounts must use the same currency. Convert percentages to fractions when a formula uses a rate: 40% = 0.40.

Price and profit

Expected unit cost

Cunit=Csuccess+Apiece\begin{gathered}C_{\mathrm{unit}}=C_{\mathrm{success}}+A_{\mathrm{piece}}\end{gathered}

Unit cost = Repeatable cost per success + One-time allocation per piece

TeX source
C_{\mathrm{unit}}=C_{\mathrm{success}}+A_{\mathrm{piece}}

Worked example: $10 of repeatable cost plus a $2 allocation gives a $12 expected cost per piece.

Repeatable costs include filament, setup waste, nozzle wear, electricity, printer depreciation, machine wear and labor. This is a modeled cost from your inputs.

Live Excel example · edit inputs and see results

Blue cells are editable. Results recalculate as you type. Each example is a separate sheet; percentages entered as inputs use whole numbers, such as 40 for 40%.

Expected unit cost — Excel cells and live results
A · DescriptionB · Value / resultExcel formula in B
1Repeatable cost per success ($)Editable input
2One-time allocation per piece ($)Editable input
3Expected unit cost ($)=B1+B2
Try in WolframAlpha ↗

Use these examples to learn the formula. They do not change your saved quote. Division by zero shows a message instead of a misleading number.

Selling price for a target margin

P=Cunit1−m\begin{gathered}P=\frac{C_{\mathrm{unit}}}{1-m}\end{gathered}

Selling price = Unit cost ÷ (1 − Target margin)

TeX source
P=\frac{C_{\mathrm{unit}}}{1-m}

Worked example: At a $10 cost and 40% target margin: $10 ÷ 0.60 = $16.666… before display rounding.

Use a fraction for margin: 40% = 0.40. Margin must be below 100%; the app caps its calculation at 99.9%.

Live Excel example · edit inputs and see results

Blue cells are editable. Results recalculate as you type. Each example is a separate sheet; percentages entered as inputs use whole numbers, such as 40 for 40%.

Selling price for a target margin — Excel cells and live results
A · DescriptionB · Value / resultExcel formula in B
1Unit cost ($)Editable input
2Target margin (%)Editable input
3Selling price ($)=IFERROR(B1/(1-B2/100),"Not defined")
Try in WolframAlpha ↗

Use these examples to learn the formula. They do not change your saved quote. Division by zero shows a message instead of a misleading number.

Profit and profit margin

Profit=P−CunitMargin(%)=ProfitP×100\begin{gathered}\mathrm{Profit}=P-C_{\mathrm{unit}} \\ \mathrm{Margin}(\%)=\frac{\mathrm{Profit}}{P}\times100\end{gathered}

Profit per piece = Selling price − Unit cost
Profit margin (%) = Profit per piece ÷ Selling price × 100

TeX source
\mathrm{Profit}=P-C_{\mathrm{unit}} \\ \mathrm{Margin}(\%)=\frac{\mathrm{Profit}}{P}\times100

Worked example: Selling at $20 with a $12 cost leaves $8 profit. Margin = $8 ÷ $20 × 100 = 40%.

Margin is undefined when selling price is zero. The displayed profit is based on the modeled costs, not a guarantee of business net income.

Live Excel example · edit inputs and see results

Blue cells are editable. Results recalculate as you type. Each example is a separate sheet; percentages entered as inputs use whole numbers, such as 40 for 40%.

Profit and profit margin — Excel cells and live results
A · DescriptionB · Value / resultExcel formula in B
1Unit cost ($)Editable input
2Selling price ($)Editable input
3Profit per piece ($)=B2-B1
4Profit margin=IFERROR(B3/B2,"Not defined")
Try in WolframAlpha ↗

Use these examples to learn the formula. They do not change your saved quote. Division by zero shows a message instead of a misleading number.

Markup is different from margin

Markup(%)=P−CunitCunit×100\begin{gathered}\mathrm{Markup}(\%)=\frac{P-C_{\mathrm{unit}}}{C_{\mathrm{unit}}}\times100\end{gathered}

Markup (%) = (Selling price − Unit cost) ÷ Unit cost × 100

TeX source
\mathrm{Markup}(\%)=\frac{P-C_{\mathrm{unit}}}{C_{\mathrm{unit}}}\times100

Worked example: A $12 cost sold at $20 has a 66.7% markup and a 40% margin. A 40% markup on $12 gives a $16.80 price and only a 28.6% margin.

Markup divides by cost; margin divides by selling price. Markup is undefined when cost is zero.

Live Excel example · edit inputs and see results

Blue cells are editable. Results recalculate as you type. Each example is a separate sheet; percentages entered as inputs use whole numbers, such as 40 for 40%.

Markup is different from margin — Excel cells and live results
A · DescriptionB · Value / resultExcel formula in B
1Unit cost ($)Editable input
2Selling price ($)Editable input
3Markup=IFERROR((B2-B1)/B1,"Not defined")
Try in WolframAlpha ↗

Use these examples to learn the formula. They do not change your saved quote. Division by zero shows a message instead of a misleading number.

Order revenue and profit

R=Pq+FCorder=Cunitq+FOrder profit=R−Corder\begin{gathered}R=Pq+F \\ C_{\mathrm{order}}=C_{\mathrm{unit}}q+F \\ \mathrm{Order\ profit}=R-C_{\mathrm{order}}\end{gathered}

Order revenue = Unit selling price × Quantity + PREPAY freight
Order profit = Order revenue − (Unit cost excluding freight × Quantity + Freight)

TeX source
R=Pq+F \\ C_{\mathrm{order}}=C_{\mathrm{unit}}q+F \\ \mathrm{Order\ profit}=R-C_{\mathrm{order}}

Worked example: 10 pieces at $20 each plus $15 freight give a $215 quote total. A $12 unit cost and $15 freight expense leave $80 profit.

The app rounds the whole order price when rounding is enabled, then derives unit price from that total. Rounding can change the actual margin. Freight is added once without markup; COLLECT and pickup add no freight charge. In these formulas, unit cost excludes freight.

Live Excel example · edit inputs and see results

Blue cells are editable. Results recalculate as you type. Each example is a separate sheet; percentages entered as inputs use whole numbers, such as 40 for 40%.

Order revenue and profit — Excel cells and live results
A · DescriptionB · Value / resultExcel formula in B
1Unit selling price ($)Editable input
2Unit cost excluding freight ($)Editable input
3QuantityEditable input
4PREPAY freight ($ per order)Editable input
5Items subtotal ($)=B1*B3
6Quote total ($)=B5+B4
7Order cost including freight ($)=B2*B3+B4
8Order profit ($)=B6-B7
Try in WolframAlpha ↗

Use these examples to learn the formula. They do not change your saved quote. Division by zero shows a message instead of a misleading number.

Change log (6 entries)
  1. Version 1.5

    Replaced Greek profit symbols with explicit Profit and Quote profit labels in formulas.

  2. Version 1.4

    Added WolframAlpha links using live inputs and increased equation, explanation and spreadsheet text sizes. Tightened image frames and spacing while retaining full-size enlargement.

  3. Version 1.3

    Typeset formulas in TeX and added live Excel examples with editable inputs, cell formulas, results and copying to Excel. Reduced inline diagram previews while keeping full-size enlargement.

  4. Version 1.2

    Replaced workflow cards with flowcharts using input, decision, document and start/end symbols, labeled branches and revision paths.

  5. Version 1.1

    Expanded the article layout to use the full available page width.

  6. Version 1.0

    Started change tracking for the current article. This version includes structured guidance, topic tags, app screenshots, a workflow diagram, formulas and worked examples.

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