Profit Margin Calculator: Gross, Net & Markup
Instantly calculate your cost, revenue, gross margin, markup, and net profit. Type into any two fields below and the rest will auto-calculate in real-time.
Margin calculator FAQ
Profit margin is one of the most important financial metrics for any business, e-commerce store, or dropshipping operation. It measures how much of every dollar in sales your company keeps as profit after accounting for costs. The gross margin looks only at the direct costs of producing the goods, while the net profit margin subtracts all other operating expenses like advertising and shipping to show your true bottom line. You can use the calculator above to model different pricing strategies and find the exact markup required to hit your target margins.
How to calculate profit margin for a product?
To calculate profit margin, subtract the cost of the product from the selling price to find your profit. Then, divide that profit by the selling price and multiply by 100 to get the percentage.
What is the profit margin formula?
The Gross Profit Margin formula is: ((Revenue - Cost) / Revenue) x 100.
What is a good profit margin?
A good profit margin depends heavily on the industry. Generally, a 5% margin is low, a 10% margin is healthy, and a 20% margin is considered high. Dropshipping and software often have much higher margins than traditional retail.
Margin vs Markup: What is the difference?
Margin is profit shown as a percentage of revenue (selling price). Markup is profit shown as a percentage of your cost. A 50% markup on a $100 cost item creates a $150 selling price, which represents a 33.3% profit margin.