dopecalc

Margin Calculator

Calculate gross profit, gross margin percentage, and markup from cost and selling price or from cost and desired margin percentage.

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About this Calculator

Calculate gross profit, gross margin percentage, and markup from cost and selling price or from cost and desired margin percentage.

Formula & Calculations

Formula

Gross Margin % = ((Selling Price - Cost) / Selling Price) × 100
Where:
  • Margin %=Gross profit margin as a percentage of selling price
  • Selling=Selling price per unit
  • Cost=Cost per unit

Assumptions

  • Assumes single-unit pricing with no volume discounts.
  • Does not include overhead, shipping, or operating expenses.
  • Gross margin is calculated as a percentage of the selling price.

Calculation Examples

Example 1

Inputs:Cost: $40.00, Selling Price: $100.00
Result:Gross Profit: $60.00, Gross Margin: 60%, Markup: 150%

An item costing $40 and sold for $100 yields $60 gross profit with a 60% margin and 150% markup.

Example 2

Inputs:Cost: $25.00, Desired Margin: 40%
Result:Selling Price: $41.67, Gross Profit: $16.67, Markup: 66.67%

To achieve a 40% margin on a $25 item, you must sell it for $41.67.

Frequently Asked Questions

What is the difference between margin and markup?

Margin is the profit as a percentage of the selling price, while markup is the profit as a percentage of the cost. A 50% markup yields only a 33.3% margin on the same item.

What is a good gross profit margin?

Good margins vary by industry. Retail typically sees 20-50%, software can be 70-90%, and grocery stores often operate on 2-5%. Compare against your specific industry benchmarks.