How do I calculate profit margin?

Profit Margin = ((Selling Price - Cost) / Selling Price) × 100%. For example, if you sell for $100 and cost is $60: Margin = (($100 - $60) / $100) × 100 = 40%. Our profit margin calculator does this automatically.

What is the difference between markup and margin?

Margin is profit as a percentage of selling price. Markup is profit as a percentage of cost. For a $60 cost and $100 price: Margin = 40% (profit/price), Markup = 66.67% (profit/cost). Same profit, different percentages. Our markup vs margin calculator shows both.

How do I calculate markup from margin?

Markup = Margin / (1 - Margin). For 40% margin: Markup = 0.40 / (1 - 0.40) = 0.40 / 0.60 = 0.667 = 66.67%. Conversely, Margin = Markup / (1 + Markup). Our calculator converts between them instantly.

How do I calculate gross profit margin?

Gross Profit Margin = ((Revenue - Cost of Goods Sold) / Revenue) × 100%. This excludes operating expenses. For $100,000 revenue with $60,000 COGS: Gross Margin = ($40,000 / $100,000) × 100 = 40%.

How do I calculate net profit margin?

Net Profit Margin = (Net Income / Revenue) × 100%. Net income is revenue minus ALL expenses (COGS, operating costs, taxes, interest). If net income is $15,000 on $100,000 revenue: Net Margin = 15%.

How do I find selling price from cost and desired margin?

Selling Price = Cost / (1 - Margin). For $60 cost and 40% desired margin: Price = $60 / (1 - 0.40) = $60 / 0.60 = $100. Our calculator finds the right price for any margin target.

What is a good profit margin for retail?

Retail gross margins typically range from 25-50% depending on industry. Groceries: 25-30%, Clothing: 40-50%, Electronics: 15-25%, Jewelry: 50-60%. Net margins are lower (2-10%). Compare against your industry benchmark.

What is a good profit margin for ecommerce?

Ecommerce gross margins typically range from 20-50%. After all fees (platform, payment, shipping, returns), aim for 10-30% net margin. Factor in customer acquisition costs for true profitability. Our ecommerce profit calculator helps analyze this.

How much profit should I make per product?

This depends on volume and overhead. High-volume products can survive on 10-20% margin. Low-volume specialty items often need 40-60% margin. Calculate your break-even point and required profit to cover all business expenses.

How do I calculate margin from selling price?

If you know selling price and cost: Margin = ((Selling Price - Cost) / Selling Price) × 100. For $80 price and $50 cost: Margin = (($80 - $50) / $80) × 100 = 37.5%.

What's the formula for markup percentage?

Markup = ((Selling Price - Cost) / Cost) × 100%. For $100 price and $60 cost: Markup = (($100 - $60) / $60) × 100 = 66.67%. Note this is higher than the margin (40%) for the same transaction.

How do I use profit margin for pricing strategy?

Set your target margin based on industry benchmarks and your costs. Calculate required selling price: Price = Cost / (1 - Target Margin). Test market acceptance. Adjust margin based on competition and demand elasticity.

Is this the best free profit margin calculator online?

Our profit margin calculator handles all calculations: margin from prices, markup from margin, selling price from desired margin, and shows the difference between margin and markup. It's free, accurate, and includes step-by-step explanations.

Profit Margin Calculator

Our comprehensive profit margin calculator handles all margin calculations for your business. Calculate profit margin from cost and selling price, understand the difference between margin and markup, find the right selling price for your desired profit margin, and analyze your pricing strategy. Essential for retail, ecommerce, and any business pricing decisions.

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calendar_today Updated: March 2025

auto_awesome AI Insights AI

Hot

Calculation Mode

Cost (What you paid)

Selling Price

info

Margin ≠ Markup

Margin = Profit ÷ Price
Markup = Profit ÷ Cost

A 50% markup = only 33.3% margin!

Profit Margin percent

40%

of selling price is profit

Markup

66.67%

of cost

Profit

$40.00

per unit

Price Breakdown

Cost

$60.00

Profit

$40.00

Selling Price $100.00

Quick Reference

20% margin= 25% markup

25% margin= 33% markup

33% margin= 50% markup

40% margin= 67% markup

50% margin= 100% markup

60% margin= 150% markup

Input Values

Calculate

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lightbulb Tips

•Margin ≠ Markup (different base!)
•50% markup = only 33.3% margin
•Retail: aim for 40-50% gross margin
•Include ALL costs for true margin

swap_horiz Margin ↔ Markup

15% margin = 17.6% markup

20% margin = 25% markup

33% margin = 50% markup

50% margin = 100% markup

60% margin = 150% markup

How to Use This Calculator

calculate

Select Calculation Type

Choose what you want to calculate: margin from prices, price from margin, or convert markup to margin.

edit

Enter Your Values

Input cost, selling price, target margin, or markup depending on your calculation type.

analytics

Get Complete Analysis

See profit margin, markup, profit amount, and step-by-step calculation.

The Formula

Profit margin shows what percentage of the selling price is profit. Markup shows what percentage was added to the cost. A 50% markup equals a 33.3% margin. Margin is always lower than markup for the same profit amount.

Profit Margin = ((Selling Price - Cost) / Selling Price) × 100%

lightbulb Variables Explained

Profit Margin Percentage of selling price that is profit
Markup Percentage added to cost: ((Price - Cost) / Cost) × 100%
Selling Price Price charged to customers
Cost Cost to produce or acquire the product
Profit Selling Price - Cost

tips_and_updates Pro Tips

Margin is calculated from selling price, markup is calculated from cost — they're different!

A 50% markup equals only 33.3% margin (not 50%)

Use margin when analyzing profitability, markup when setting prices from cost

Gross margin excludes operating expenses, net margin includes all expenses

Retail typically aims for 50%+ gross margin, ecommerce often needs 30%+

Higher margin doesn't always mean more profit — volume matters too

Factor in all costs (shipping, fees, returns) for accurate margin calculation

Calculate Profit Margin, Markup & Pricing Instantly

Our free profit margin calculator helps you understand your business profitability. Calculate profit margin from cost and selling price, find the right selling price for your target margin, understand the difference between margin and markup, and optimize your pricing strategy. Essential for retail, ecommerce, and any business.

Profit Margin Calculator for Business

Calculate your exact profit margin percentage from any product cost and selling price. Our business profit calculator shows both gross margin and markup, helping you understand your true profitability. Perfect for retail stores, ecommerce, and wholesale businesses.

Markup vs Margin Calculator

Understand the crucial difference between markup and margin. A 50% markup does NOT equal 50% margin — it equals 33.3% margin. Our markup vs margin calculator converts between them and shows why this distinction matters for pricing and profitability analysis.

Gross & Net Profit Margin Calculator

Calculate both gross profit margin (revenue minus COGS) and understand net profit margin (after all expenses). Our gross profit margin calculator helps you analyze product-level profitability, while net margin shows overall business health.

Pricing Calculator with Target Margin

Find the right selling price to achieve your target profit margin. Enter your cost and desired margin percentage, and our pricing margin calculator shows exactly what price to charge. Essential for competitive pricing strategy.

Frequently Asked Questions

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