Profit Margin Calculator

This calculator works three ways depending on what you already know. Switch the toggle at the top to "Cost + Price" if you know both numbers and want to discover your margin. Switch to "Cost + Margin %" to figure out what selling price hits a target margin. Switch to "Price + Margin %" to back into the cost you can afford to pay your supplier while still hitting your margin goal.

Enter values as you go — the result updates live, with no "calculate" button. Currency fields accept any reasonable format ($1,234, 1234, or 1,234.56). Percentages should be entered as numbers, not decimals: type 25 for 25%, not 0.25.

A common mistake: forgetting to include shipping, payment processing fees (typically 2.9% + $0.30), and packaging in your cost. If you skip these, your real-world margin will be lower than what this calculator shows. For an accurate read on your business, push all variable per-sale costs into the "cost" input.

The result panel shows four numbers. Profit margin (the big number) is the percentage of revenue you keep after paying for the cost of the item. Markup is the percentage you added on top of cost — note that these are different numbers describing the same dollar of profit, just from different angles.

Gross profit is the dollar amount you make per unit before any operating expenses like rent, marketing, or salaries. To estimate your true net margin, subtract your monthly operating expenses divided by units sold from your gross profit per unit. A 40% gross margin with $20,000/month in overhead and 1,000 units sold gives you a $20/unit overhead burden — eating heavily into that gross profit.

How do margins compare across industries? Software companies regularly post 70%+ gross margins because their cost of goods sold is mostly server costs. Restaurants target 60–70% gross margin on food (the rest goes to labor and rent in the operating section). Grocery and gas retail run on 1–5% margins and make money on volume.

If your margin is negative, you are selling at a loss — the cost exceeds the price. Either raise the price, lower the cost, or stop selling that product. Some businesses intentionally use loss leaders to attract customers, but everything cannot be a loss leader.