Margin Calculator
Calculate Gross Profit Margin and Markup percentage. Essential for retail and ecommerce pricing.
Product Costing
Profit Metrics
Gross Margin
0.00%
Price Your Products Perfectly
Incorrect pricing is the #1 reason why small businesses fail. Confusing Margin and Markup can lead to selling products below profitability.
The Golden Rules:
- Markup is for setting the price. “I bought this for ₹100, let’s mark it up by 50% to sell at ₹150.”
- Margin is for measuring the profit. “I sold it for ₹150. My cost was ₹100. My profit is ₹50. My margin is 33.3%.”
Quick Reference Table
| Desired Margin | Required Markup |
|---|---|
| 10% | 11.1% |
| 20% | 25.0% |
| 30% | 42.9% |
| 50% | 100.0% |
| 75% | 300.0% |
Use our calculator to toggle instantly between finding Margin, Markup, or the required Sale Price.
Frequently Asked Questions
What is Profit Margin?
Profit margin is the percentage of revenue that remains as profit after covering costs. It measures how much out of every rupee of sales a company actually keeps in earnings.
What is the formula for Margin?
Gross Margin % = `((Revenue - Cost) / Revenue) * 100`. Note that Margin is calculated on the *Selling Price*.
What is the difference between Margin and Markup?
Crucial difference: Margin is based on *Sales Price*, Markup is based on *Cost Price*. Margin is always lower than Markup for the same profit.
What is the formula for Markup?
Markup % = `((Revenue - Cost) / Cost) * 100`. This shows how much you inflated the cost price to reach the selling price.
Why do retailers prefer Margin?
Because it shows the profit as a percentage of total sales revenue, which is easier to compare with other financial metrics on the income statement.
If I want 20% margin, what should be my markup?
To get a 20% margin, you need a 25% markup. Example: Cost 100. Sale 125. Profit 25. Margin = 25/125 = 20%. Markup = 25/100 = 25%.
What is a 'Good' profit margin?
It varies by industry. Grocery stores have thin margins (~2-5%), while software companies can have huge margins (60-80%). Generally, 10-20% is considered healthy.
How does discount affect margin?
Discounts eat directly into your margin. A small discount can wipe out a significant chunk of your net profit.
What is Net Margin vs Gross Margin?
Gross margin considers only COGS (Cost of Goods Sold). Net margin subtracts ALL expenses (rent, salaries, tax, marketing) to show the final bottom line.
Can margin be negative?
Yes, if your Cost is higher than your Selling Price (selling at a loss), you have a negative margin.