Profit Margin Calculator
Calculate gross profit, profit margin %, and markup % from cost and selling price, or determine the required retail price to achieve a target profit margin.
Pricing Parameters
The direct cost incurred to manufacture or buy the item.
What is the difference between Margin and Markup?
Profit Margin is profit divided by the selling price (e.g. $40 profit on a $100 price = 40% margin).
Markup is profit divided by the cost (e.g. $40 profit on a $60 cost = 66.7% markup).
Revenue minus Cost of Goods Sold
$100.00
+66.67%
Price Composition
Profit Margin vs. Markup: The Mathematical Difference
While many people use "margin" and "markup" interchangeably, they represent two completely different business metrics with different denominators:
- Profit Margin (%): The percentage of final revenue that you keep as profit.
Margin = (Gross Profit / Selling Price) × 100 - Markup (%): The percentage added on top of your cost to arrive at the selling price.
Markup = (Gross Profit / Cost) × 100
Example: If an item costs $60 and sells for $100, the gross profit is $40.
The margin is $40 / $100 = 40%.
The markup is $40 / $60 = 66.7%.
How to Use Profit Margin Calculator (Step-by-Step)
Enter the cost of goods sold (COGS) or production cost per unit.
Enter your intended retail selling price, or enter your desired target margin percentage.
Instantly view gross profit, margin percentage, markup percentage, and visual profit split.
Applications
Common Use Cases
- Calculate gross profit margin and markup percentage for e-commerce or retail items.
- Determine the exact selling price required to hit target profit margins.
- Avoid confusing margin with markup when setting client quotes or retail pricing.
Privacy Guarantee
Zero Server Uploads
Unlike traditional online converters that upload your confidential documents to external cloud servers, MultiToolX executes computations in your browser runtime via HTML5 Canvas, Web Crypto, and WebAssembly.
Your data never leaves your device and cannot be viewed, stored, or harvested by anyone.
Gross Margin vs Markup: Formulas, Calculations & Pricing Mistakes to Avoid
A complete guide to profit margin vs markup percentage formulas. Discover common pricing traps that destroy profit and learn how to price items correctly.
FAQ
Frequently Asked Questions
What is the difference between margin and markup?
Margin is profit divided by selling price (revenue). Markup is profit divided by original cost. A 50% markup on a $100 item yields a $150 price, which is a 33.3% margin.
What is a good profit margin for small businesses?
Most retail and e-commerce businesses aim for a 50% to 60% gross margin, while software and consulting businesses often operate at 70% to 85% gross margins.
Can I use this tool for wholesale pricing?
Yes. Enter your manufacturing cost and target wholesale or distributor margin to find your required wholesale tier price.
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