Profit Margin Calculator
Know your numbers. Calculate profit, margin, and markup — or find the right price.
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How the Profit Margin Calculator Works
Enter your cost and selling price to instantly see three key business metrics: profit (the raw dollar amount you make), margin (profit as a percentage of selling price), and markup (how much you marked up the cost). Enable reverse mode to work backwards: enter your cost and target margin to find the required selling price.
Frequently Asked Questions
What is the difference between margin and markup?
Margin and markup both measure profitability, but from different reference points. Margin = (Profit / Selling Price) × 100 — it tells you what percentage of your revenue is profit. Markup = (Profit / Cost) × 100 — it tells you how much you marked up your cost to arrive at the price. A 50% markup on a $10 cost gives a $15 price, but the margin on that sale is only 33%. This distinction matters when setting prices.
What is a good profit margin?
It depends heavily on the industry. Grocery retail typically operates at 1–3% net margin. Software and SaaS companies often achieve 20–40% or higher. Service businesses like consulting can reach 30–50%. As a general benchmark: under 5% is thin, 10–20% is healthy for most product businesses, and anything above 20% is strong. Always compare to industry peers rather than a universal standard.
Why can't I set a margin of 100% or more?
A margin of 100% would mean your cost is zero and your entire selling price is profit — mathematically possible but not a real business scenario. A margin above 100% is mathematically impossible because profit cannot exceed the selling price. Markup, however, can be any positive number (a 200% markup simply means you tripled the cost).
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