Profit Margin Calculator

Profit Margin Calculator

Calculate gross profit margin, markup, and dollar margin. Use it to compare products, test discount ideas, and hit profitability targets.

Worked example: Price = $100, Cost = $70 → Margin = $30, Margin% = 30%, Markup% = 42.86%.

Formulas & When to Use Each

  • Margin ($) = Price − Cost — use to see absolute profit.
  • Margin (%) = (Price − Cost) ÷ Price × 100 — use to compare profitability across products/channels.
  • Markup (%) = (Price − Cost) ÷ Cost × 100 — use when pricing from cost up to target margin.

Scenario Planner

  • Discount: 10% off price lowers margin% more than you think—retest your targets.
  • Cost shock: If cost rises 8% but price doesn’t, margin% compresses—consider a price change or cost cuts.
  • Channel fees: Marketplaces add % fees; include them in COGS for realistic margins.

Gross vs Net Margin

Gross margin looks at price minus direct costs (COGS). Net margin subtracts operating expenses, interest, and tax from revenue before dividing by revenue. This tool calculates gross margin. For net margin, add your overheads to cost or use a dedicated net‑margin calculator.

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FAQs

What’s a “good” margin?

It varies by industry. Software often targets higher margins than retail. Compare to your category benchmarks.

Margin vs Markup—why do they differ?

Margin divides by price; markup divides by cost. A 30% margin equals a 42.86% markup at the same numbers.

References