Profit Margin Calculator
Plug in product cost and selling price to instantly see profit, margin %, and markup %. Great for pricing strategy, quoting, and supplier negotiations.
Margin vs Markup
Margin measures profit as a percentage of selling price. Markup measures profit as a percentage of cost. Confusing the two leads to underpricing or inflated expectations.
| Cost | Sell Price | Profit | Margin % | Markup % |
|---|---|---|---|---|
| $50 | $100 | $50 | 50% | 100% |
| $60 | $90 | $30 | 33.3% | 50% |
| $75 | $100 | $25 | 25% | 33.3% |
| $40 | $80 | $40 | 50% | 100% |
| $30 | $50 | $20 | 40% | 66.7% |
Quick Formulas
- Profit = Selling Price – Cost
- Margin % = (Profit ÷ Selling Price) × 100
- Markup % = (Profit ÷ Cost) × 100
- Selling Price = Cost ÷ (1 – Desired Margin)
Pricing Playbook
Set Smart Prices
Know the minimum margin you can accept before negotiating. Use the calculator to model “what-if” scenarios.
Plan Promotions
Discounts shrink margins. Calculate how much extra volume you’ll need to sell before launching a sale.
Compare Suppliers
Run the numbers when you receive new quotes. Small cost differences can swing profit dramatically.
Portfolio Mix
Identify high-margin products to feature and low-margin products to bundle or discontinue.
Frequently Asked Questions
It depends on your industry. Retail averages 20–50%, restaurants 5–15%, software 70%+. Benchmark against peers and your cost structure.
Use Selling Price = Cost ÷ (1 – Desired Margin). Example: Cost $60, margin goal 40% → $60 ÷ 0.6 = $100.
This tool calculates gross margin (revenue minus cost of goods). Net margin subtracts overhead, payroll, marketing, etc.