Margin Calculator

Calculate your margin and markup.

Explanation

Gross Margin or Markup? Don't confuse these two key indicators for your business profitability anymore. ### Definitions - **Gross Profit (Margin)**: The raw difference between Selling Price and Cost Price. (SP - CP). - **Gross Margin %**: The percentage of the selling price that is profit. (Profit / Selling Price) x 100. This is the standard metric for profitability. - **Markup %**: The percentage added to the cost price. (Profit / Cost Price) x 100. ### Concrete Example I buy a product for $100 and sell it for $150. - Profit = $50. - Gross Margin = 33.3% (50/150). - Markup = 50% (50/100). ### Utility Gross Margin tells you what percentage of your revenue is actually yours to cover fixed costs (rent, salaries, etc.).

Examples

Cost $60, Sell $100: Profit $40, Margin 40%.
To achieve a 20% margin on a product costing $80, you must sell it for $100 (80 / (1 - 0.20)).

FAQ

What is a good margin?

It depends on the industry. Retail is often 20-50%, Restaurants 70%, Software 80%+.

Tax included?

In business management, always calculate without Sales Tax/VAT. Tax is not profit.

Disclaimer

Financial results are estimates and do not constitute investment advice.