Profit Margin Calculator
Feed in what you charge and what it costs, and see the gross profit, the margin, and the markup — three angles on the same sale.
How it works
Gross profit is the easy part: revenue minus cost. Sell for $2,500 on $1,500 of goods and you keep $1,000. Margin then asks what slice of the sale that profit represents — here, 40%.
Margin and markup measure the same $1,000 against different bases. Margin divides profit by revenue; markup divides it by cost. That's why a 40% margin lines up with a 66.7% markup, and mixing them up is how prices quietly get set too low.
Because margin is a percentage of the sale, it stays comparable across products at very different price points. A $12 item and a $1,200 item can both run a 30% margin, which makes the number handy for spotting which lines actually pull their weight.
Frequently asked questions
What's the difference between margin and markup?
They divide the same profit by different numbers. Margin is profit over revenue; markup is profit over cost. A $40 item sold for $100 carries a 60% margin but a 150% markup.
How do I calculate gross profit margin?
Subtract cost from revenue, then divide that profit by the revenue and multiply by 100. Revenue of $500 on a $350 cost leaves $150, which is a 30% margin.
Is a higher margin always better?
Usually, but not blindly. A fat margin on a product nobody buys earns less than a thin margin on high volume. Read margin next to how many units actually move.