Margin Calculator
Calculate profit margin, markup percentage, and gross margin for pricing and business analysis.
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How to Use This Calculator
- Enter the cost of the product or service
- Input the selling price (revenue) per unit
- Click 'Calculate' to see profit metrics
- View gross profit (revenue minus cost)
- Review profit margin percentage
- Check markup percentage for pricing strategy
Formula
Gross Profit = Revenue - Cost; Profit Margin = (Gross Profit ÷ Revenue) × 100; Markup = (Gross Profit ÷ Cost) × 100
Frequently Asked Questions
What's the difference between margin and markup?▼
Margin is profit as a percentage of selling price: (Profit ÷ Revenue) × 100. Markup is profit as a percentage of cost: (Profit ÷ Cost) × 100. A 50% markup equals a 33.3% margin. Margin is always lower than markup for the same profit amount.
What is a good profit margin?▼
It varies by industry. Retail typically sees 2-5%, restaurants 3-6%, software/SaaS 70-90%, and professional services 15-20%. Higher margins generally indicate better profitability, but very high margins may attract competition.
How do I calculate selling price from desired margin?▼
Use the formula: Selling Price = Cost ÷ (1 - Desired Margin). For example, if cost is $100 and you want a 30% margin: $100 ÷ (1 - 0.30) = $142.86 selling price.
What's the difference between gross margin and net margin?▼
Gross margin is (Revenue - Cost of Goods Sold) ÷ Revenue. Net margin is (Revenue - All Expenses) ÷ Revenue. Net margin accounts for operating expenses, taxes, and interest, giving a complete picture of profitability.