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Margin & Markup Calculator

Quickly determine your gross profit, profit margin, and markup percentage.

How to Calculate Margin and Markup?

If you run a retail, wholesale, or e-commerce business, understanding your pricing economics is crucial for survival. Our free Margin and Markup Calculator instantly breaks down the profitability of any item you sell.

  1. Enter your Cost: This is the total amount you paid to acquire or manufacture the item (Cost of Goods Sold).
  2. Enter your Selling Price: This is the final price at which you are selling the item to your customer.
  3. Calculate: Click the button to instantly see your Gross Profit (in cash), your Profit Margin (percentage), and your Markup (percentage).

The Mathematical Formulas

Frequently Asked Questions (FAQ)

What is the difference between Margin and Markup?

While both metrics measure profitability, they use different baselines. Margin shows profit as a percentage of your Selling Price (Revenue). Markup shows profit as a percentage of your Cost. Margin is used to evaluate the overall health of a business, while markup is generally used to set initial prices.

Can Margin ever be higher than 100%?

No. Gross Margin cannot exceed 100% because you cannot make more profit than the total revenue you brought in. However, Markup can easily exceed 100%. If you buy an item for $10 and sell it for $30, your markup is 200%, but your margin is 66.6%.

What is a good profit margin?

A "good" margin depends entirely on your industry. A grocery store might operate on a 2% to 3% net margin, while a software company (SaaS) might operate on an 80% to 90% gross margin. For standard retail, a 50% gross margin (which is a 100% markup, also known as "Keystone pricing") is a common target.