Profit Margin Calculator
Quickly determine your gross profit, profit margin percentage, and markup from your product cost and selling price.
Calculator Inputs
LiveHow to use the Profit Margin Calculator
- 1Enter the unit cost (the total cost to purchase or manufacture the product).
- 2Enter the selling price (or expected revenue per item).
- 3The tool immediately calculates net profit, profit margin percentage, and markup percentage.
How Profit Margin is Calculated
Profit margin is the proportion of total sales revenue remaining after paying production and acquisition costs, expressed as a percentage of revenue.
- Revenue represents gross selling price, and Cost represents cost of goods sold (COGS).
- Note that margin is divided by revenue, whereas markup is divided by cost.
- 1Gross Profit = $100 - $60 = $40
- 2Profit Margin = ($40 / $100) × 100 = 40.00%
- 3Markup = ($40 / $60) × 100 = 66.67%
What affects Profit Margin results
- Cost of Goods Sold (COGS), including shipping, manufacturing, and supplier charges.
- Discounts or promotional price cuts.
- Sales channel marketplace fees or payment gateway costs.
Frequently Asked Questions
What is the main difference between margin and markup?
Margin is profit divided by selling price (revenue), while markup is profit divided by cost. A 50% markup yields a 33.3% margin.
What is a healthy profit margin for business?
Generally, a 10% net profit margin is considered average, 20% is good, and 30%+ is exceptional, though margins vary widely across industries.
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