Profit Margin Calculator

Calculate margin, markup, and selling price from cost and revenue

Calculate Margin from Cost & Revenue

Cost

Revenue / Selling Price

Profit

Profit Margin

Markup

Cost Ratio

Calculate Price from Cost + Desired Margin

Cost

Desired Margin (%)

Profit as % of selling price

Selling Price

Profit

Equiv. Markup

// Margin vs Markup

Margin = profit ÷ revenue (% of selling price). Markup = profit ÷ cost (% of cost). A 50% markup is only a 33% margin. They're often confused but mean very different things.

// Healthy Margins

Margins vary by industry: retail 2-5%, restaurants 3-9%, software 70-90%, consulting 15-25%. Know your industry benchmarks and aim to exceed them.

// Gross vs Net

Gross margin only accounts for direct costs (COGS). Net margin includes all expenses (rent, salaries, tax). Both matter — gross margin shows product viability, net shows business health.

// Pricing Strategy

Cost-plus pricing (adding a fixed margin to cost) is simple but ignores market value. Consider value-based pricing — what the customer is willing to pay — for higher margins.