Profit Margin Calculator
How to Use This Calculator
- Enter the selling price (revenue per unit).
- Enter the cost (what you paid per unit).
- Click "Calculate Margin" to see profit, margin %, and markup %.
Margin vs. Markup Formulas
Profit Margin = (Revenue − Cost) ÷ Revenue × 100
Markup = (Revenue − Cost) ÷ Cost × 100
Margin is profit as a share of the selling price; markup is profit as a share of cost. Markup is always higher than margin for the same numbers.
Worked Example
Sell at $100, cost $70: Profit = $30. Margin = $30 ÷ $100 = 30%. Markup = $30 ÷ $70 = 42.86%.
Frequently Asked Questions
What is the difference between margin and markup?
Margin expresses profit as a percentage of the selling price; markup expresses it as a percentage of cost. A 30% margin equals a 42.86% markup on the same item. Retailers often talk markup; financial statements report margin.
What is a good profit margin?
It varies hugely by industry: grocery stores run ~1–3% net margins, while software can exceed 20%. Compare against competitors in your sector rather than chasing a universal target. Track the trend over time.
How do I set a price from a target margin?
Rearrange the formula: Price = Cost ÷ (1 − Margin). For a 40% margin on a $60 cost: $60 ÷ (1 − 0.40) = $60 ÷ 0.60 = $100.
Shahnawaz
Shahnawaz is the founder of DaProfitClub, a free online platform offering 100+ calculators and converters for finance, health, math, and everyday life. With a background in finance and mathematics, he designs accurate, easy-to-use tools.
Sources: U.S. Small Business Administration (sba.gov) — pricing and profitability guidance; Investopedia — gross vs. net profit margin definitions.