Profit Margin & Markup Calculator
Calculate both profit margin and markup percentages for your products and services
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Profit Analysis
Your margin and markup results
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Profit Margin
Profit as % of selling price0%
Markup Percentage
Markup as % of cost priceFinancial Breakdown
Cost Price:
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Selling Price:
$0.00
Gross Profit:
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Profit per $100 cost:
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Target Margin Results
Required pricing for your target margin
Cost Price:
$0.00
Target Margin:
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Required Selling Price:
$0.00
Equivalent Markup:
0%
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Target Markup Results
Required pricing for your target markup
Cost Price:
$0.00
Target Markup:
0%
Required Selling Price:
$0.00
Equivalent Margin:
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Margin vs Markup: What's the Difference?
Profit Margin is the percentage of profit based on the selling price. Markup is the percentage added to the cost price to determine selling price. A 50% markup equals a 33% margin. Understanding this difference is crucial for accurate pricing!
Understanding Profit Calculations
Key Formulas
Profit Margin
Margin = ((Price - Cost) / Price) × 100
Markup Percentage
Markup = ((Price - Cost) / Cost) × 100
Selling Price from Margin
Price = Cost / (1 - Margin/100)
Selling Price from Markup
Price = Cost × (1 + Markup/100)
Industry Benchmarks
- Retail: 20-30% margin (25-43% markup)
- Manufacturing: 15-25% margin (18-33% markup)
- Services: 30-50% margin (43-100% markup)
- Software: 70-90% margin (233-900% markup)
- Restaurants: 3-15% margin (3-18% markup)
Common Mistake
Don't confuse margin with markup! A 50% markup is NOT a 50% margin. It's actually a 33% margin.
Pricing Strategies
- Consider your target market and competition
- Factor in all costs (materials, labor, overhead)
- Use psychological pricing ($19.99 vs $20)
- Test different price points
- Review and adjust prices regularly
- Consider volume discounts for bulk purchases
- Account for seasonal fluctuations