Profit Margin Calculator
Calculate gross, operating, and net profit margins.
Input
Profit Margin
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How to Calculate Profit Margin and Markup
Overview
Profit margin and markup both describe the gap between cost and price, but they are not the same number — confusing them leads to underpricing. This calculator takes your cost and revenue and returns gross profit, profit margin, and markup so you can price products correctly. It runs entirely in your browser.
How to Use (Step by Step)
- 1
Enter the cost
What it costs you to produce or buy the item.
- 2
Enter the revenue
The selling price you charge the customer.
- 3
Read margin and markup
Use margin to understand profitability and markup to set prices from cost.
How It Works
Gross profit = revenue − cost. Profit margin = (gross profit ÷ revenue) × 100, expressing profit as a share of the selling price. Markup = (gross profit ÷ cost) × 100, expressing profit as a share of cost. A 50% markup is only a 33% margin, which is why mixing them up understates the price you actually need.
When to Use This
Setting a selling price that hits a target margin. Comparing the profitability of different products. Translating a supplier's markup into the margin it really gives you.
Frequently Asked Questions
Margin is profit as a percentage of the selling price; markup is profit as a percentage of cost. The same dollar profit gives a smaller margin number than markup number.