Online Percent Calculator Logo

Profit Margin Calculator

Calculate your gross profit margin and markup to determine the best pricing strategy for your products.

Calculate

Profit Margin

50.0%

Revenue Breakdown

Visualizing what portion of your sale price is profit versus cost.

50%
Cost: 50
Profit: 50

Visualization based on calculated inputs

Gross Profit$50.00
Markup100.0%
Cost-to-Revenue50.0%

Share Result

WhatsAppXRedditFacebook

Related Financial & Money Calculators Calculators

Bill Increase Calculator

Determine the percentage increase of utility bills, subscriptions, and recurring expenses so...

CALCULATE

Compound Interest Calculator

Calculate how your investments grow over time with the power of compounding.

CALCULATE

Discount Calculator

Quickly find the final price and total savings on any percentage discount....

CALCULATE

Down Payment Percentage Calculator

Enter the total purchase price and the amount you plan to put...

CALCULATE

Inflation & Purchasing Power Calculator

Calculate how the value of money changes over time due to inflation.

CALCULATE

Investment ROI & CAGR Calculator

Calculate your total return on investment (ROI) and compound annual growth rate...

CALCULATE

Quick answer

Profit margin is the percentage of revenue that remains as profit after costs are deducted. Formula: Margin (%) = ((Revenue - Cost) / Revenue) * 100. Markup, on the other hand, is the percentage added to the cost to reach the sales price. Formula: Markup (%) = ((Revenue - Cost) / Cost) * 100.

Find the sweet spot between cost and profit.

Formula

Gross Profit = Revenue - Cost. Margin = (Profit / Revenue) * 100. Markup = (Profit / Cost) * 100.

How It Works

  1. Input the total cost to produce or acquire the item (COGS).
  2. Enter your intended sales price (Revenue).
  3. Compare the generated Margin % with your industry benchmarks.
  4. Check the Markup % to see how much you are "tagging on" to the cost.

Formula:

Margin = (Revenue - Cost) / Revenue

Examples

Buy for $50, Sell for $100.

Result: 50% Margin. 100% Markup.

Cost $80, Sell $100.

Result: 20% Margin. 25% Markup.

Frequently Asked Questions

What is the difference between Margin and Markup?

Margin is calculated based on Revenue, while Markup is based on Cost. Margin is used for bottom-line analysis; Markup is used for setting prices.

What is a good profit margin for ecommerce?

It varies by industry, but typical ecommerce gross margins range from 30% to 50%.

How to calculate a specific margin?

If you want a 40% margin on a $50 cost, use: Price = Cost / (1 - 0.4). So $50 / 0.6 = $83.33.

Key facts

Margin is the most critical metric for assessing business health and sustainability. A "High Margin" business (50%+) typically has lower sales volume but high per-unit profitability. Common pricing error: confusing 50% markup (cost + 50%) with 50% margin (cost * 2). Net Profit Margin also accounts for operating expenses, taxes, and interest, unlike Gross Margin.

Trend & Behavior Analysis

The Margin Curve (Y-axis) increases at a diminishing rate as Sale Price (X-axis) rises. To double your margin from 10% to 20%, you need a larger price hike than moving from 50% to 60%, assuming fixed costs.

Related Articles