Profit Margin Calculator
Calculate profit margins, gross margins, and net margins from cost and selling price. Get instant, accurate results to make smarter pricing decisions for your business.
Calculator Interface
Calculate profit margins from revenue and costs
Results Dashboard
Ready to Calculate
Enter your cost and selling price to see detailed margin analysis
Product Comparison
| Product | Cost | Price | Margin % | Profit | Actions |
|---|
Gross Profit Margin
Net Profit Margin
Markup Percentage
Total Profit
ROI (Return on Investment)
Per-Unit Breakdown
Profit Margin Gauge
Cost Breakdown
How to Calculate Profit Margin - Complete Guide for Business Owners
Master profit margin calculations with our comprehensive guide. Learn to calculate gross margin, net profit margin, and use our profit margin calculator effectively.
What is Profit Margin? Understanding the Profit Margin Formula
A profit margin calculator helps you determine the percentage of profit your business makes from revenue. The profit margin formula shows how much profit you keep from each dollar of sales, making it essential for pricing strategy and financial health assessment.
Profit Margin Formula: Profit Margin = (Revenue - Cost) / Revenue × 100
Use our calculator above to calculate profit margin instantly without manual calculations.
Profit Margin vs Markup - Understanding the Difference
Profit Margin measures profit as a percentage of the selling price - what you keep after the sale.
Markup measures the percentage added to your cost to determine the selling price.
Profit Margin Benchmarks by Industry
Compare your profit margin calculator results against industry standards:
| Industry | Net Profit Margin |
|---|---|
| Retail | 2-5% |
| E-commerce | 10-20% |
| Software/SaaS | 70-85% |
| Food Service | 3-7% |
| Consulting | 15-30% |
Business Terms Glossary
Profit Margin
The percentage of revenue that remains as profit after subtracting costs.
Markup
The amount added to the cost price to determine the selling price.
ROI
Return on Investment - measures the efficiency of an investment.
Break-even Point
The level of sales needed to cover all fixed and variable costs.
Cost of Goods Sold (COGS)
Direct costs associated with producing goods sold by a company.
Gross Profit
Revenue minus the cost of goods sold.
Net Profit
Gross profit minus all operating expenses, taxes, and fees.
Variable Costs
Variable costs to enter in calculator - change with production. The calculator adjusts calculations accordingly.
Powerful Margin Calculator Features
Everything you need to calculate margins, markup percentages, and make informed pricing decisions for your business.
5 Calculation Modes
Basic, Reverse, Markup, Comparison, and Break-even analysis modes for comprehensive margin calculations.
Real-time Results
Instant calculations with visual charts, gauges, and detailed breakdowns of your profit margins.
History & Export
Save calculations, export to PDF/CSV, and track your pricing history for better business decisions.
Mobile Optimized
Fully responsive design that works perfectly on all devices - desktop, tablet, and mobile.
What Small Business Owners Say
See how entrepreneurs are using our margin calculator to make better pricing decisions and grow their businesses.
"This margin calculator saved me hours of work. The break-even analysis helped me price my products correctly and increase profits by 23% in just 2 months!"
Sarah Mitchell
Founder, Artisan Bakery Co.
"As a restaurant owner, understanding food cost margins is crucial. This tool helps me adjust prices instantly when ingredient costs change. It's intuitive and fast!"
Mike Rodriguez
Owner, Casa Bistro
"The comparison mode is fantastic! I can analyze multiple products at once and see which ones give me the best margins. Perfect for my e-commerce business."
Anna Chen
CEO, Tech Gadgets Plus
Financial Experts Behind the Tool
Meet the team of financial professionals and developers who built this powerful margin calculator for small businesses.
Profit Margin Calculator FAQs
Get answers to frequently asked questions about how to calculate profit margin, use our profit margin calculator, and improve your business profitability.
How do I calculate profit margin using the profit margin formula?
To calculate profit margin, use this formula: Profit Margin = [(Selling Price - Cost) / Selling Price] × 100. For example, if you sell a product for $100 with a cost of $70, your profit margin is (100-70)/100 = 30%. Our free profit margin calculator computes this instantly - just enter your cost and selling price for accurate results.
What's the difference between gross profit margin and net profit margin?
Gross profit margin calculates profit after subtracting direct costs (COGS - cost of goods sold) from revenue. Net profit margin includes all business expenses like taxes, fees, operating costs, and overhead. Our profit margin calculator can compute both gross and net margins to give you a complete picture of your business profitability and help optimize pricing strategies.
How to use a profit margin calculator for retail business?
For retail businesses, enter your wholesale cost and retail selling price into our profit margin calculator. The calculator instantly shows your profit margin percentage and profitability metrics. Retail businesses typically target 50-60% markup, which our calculator automatically converts to profit margin percentage. Use the calculator to find optimal pricing that balances competitiveness with profitability.
Can I calculate profit margins for multiple products at once?
Yes! Our profit margin calculator includes a comparison mode that lets you calculate and compare profit margins for multiple products simultaneously. The calculator analyzes profitability across your entire product line, helping you identify high-margin items and make data-driven inventory decisions. This feature is perfect for businesses managing multiple SKUs or product categories.
What is a good profit margin for my business?
Good profit margins vary by industry. Retail typically sees 2-5%, e-commerce 10-20%, software 70-85%, food service 3-7%, and consulting 15-30%. Use our industry benchmarks as a guide and focus on consistently improving over time.
How can I improve my profit margins?
Improve margins by: 1) Reducing costs through better suppliers or efficiency, 2) Strategic price increases, 3) Adding value to justify higher prices, 4) Focusing on higher-margin products, 5) Reducing waste and overhead, 6) Improving operational efficiency.
How accurate is this profit margin calculator?
Our profit margin calculator delivers precise calculations accurate to 2 decimal places, using standard accounting formulas and profit margin calculations. The calculator updates instantly as you type, providing real-time profit margin results. This professional-grade calculator is suitable for financial planning, business reporting, tax preparation, and strategic pricing decisions.
Master Your Margin Calculator - Complete Tutorial
Learn how to use every feature of our margin calculator to maximize your business profitability. This calculator guide covers all modes and advanced features.
Basic Calculator Mode
The basic margin calculator is perfect for quick calculations. Simply enter your cost and selling price, and the calculator instantly shows your profit margin percentage. This calculator mode is ideal for everyday pricing decisions.
- ✓ Enter cost price in the calculator's first field
- ✓ Add selling price to see margin calculator results
- ✓ Calculator displays profit margin and markup instantly
Reverse Calculator Mode
Use the reverse calculator when you know your desired margin but need to find the selling price. This calculator mode helps you work backwards from your target profitability. The reverse calculator is essential for strategic pricing.
- ✓ Input your cost into the calculator
- ✓ Set target margin percentage in calculator
- ✓ Calculator suggests optimal selling price
Markup Calculator Mode
The markup calculator helps you understand the relationship between margin and markup. Many businesses confuse these metrics - our calculator clarifies the difference. Use this calculator mode for retail pricing strategies.
- ✓ Enter base cost in the markup calculator
- ✓ Set desired markup percentage in calculator
- ✓ Calculator converts between margin and markup
Comparison Calculator Mode
Compare multiple products simultaneously with our comparison calculator. This calculator mode helps identify your most profitable items. The comparison calculator is perfect for inventory optimization and product mix decisions.
- ✓ Add multiple products to the calculator
- ✓ Calculator compares margins side-by-side
- ✓ Identify best performers with calculator analytics
Break-even Calculator Mode
The break-even calculator determines how many units you need to sell to cover costs. This calculator factors in fixed and variable costs for comprehensive analysis. Use this calculator for business planning and forecasting.
- ✓ Enter fixed costs in the calculator
- ✓ Add variable costs per unit to calculator
- ✓ Calculator shows break-even point and timeline
Advanced Calculator Features
Our margin calculator includes advanced features for professional use. The calculator supports batch processing, data export, and calculation history. These calculator tools enhance productivity and accuracy.
- ✓ Export calculator results to CSV format
- ✓ Calculator maintains session history
- ✓ Batch calculator for multiple calculations
Pro Tips for Using This Margin Calculator
For Retailers Using the Calculator
Retail businesses should use the calculator's comparison mode to analyze product mix. The calculator helps identify slow-moving inventory with low margins. Use this calculator data to optimize your product selection.
For Service Businesses Using the Calculator
Service providers can use the calculator to price hourly rates or project fees. Include all overhead costs in the calculator for accurate margins. This calculator ensures you're pricing services profitably.
For E-commerce with the Calculator
Online sellers should factor platform fees into the calculator. Use the additional costs feature in our calculator for shipping and returns. The calculator helps maintain profitability across channels.
For Restaurants Using the Calculator
Restaurants can use the calculator for menu engineering. Input food costs and target margins into the calculator. This calculator helps achieve optimal food cost percentages.