Profit Margin & Markup Calculator
Calculate gross profit margin, markup percentage, and profit dollars for products and services.
Gross Profit Margin
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How to Calculate Profit Margin & Markup
- Enter your Cost of Goods Sold (Cost Price).
- Enter your selling Revenue (Sale Price).
- The tool computes your Gross Profit, Profit Margin percentage, and Markup percentage instantly.
Profit Margin vs Markup Formulas
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Gross Profit:
Gross Profit = Revenue - Cost -
Profit Margin (%):
Margin = (Gross Profit / Revenue) × 100 -
Markup (%):
Markup = (Gross Profit / Cost) × 100
Worked Commercial Example
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Item costs
$60.00to manufacture and sells for$100.00.Gross Profit = $40.00.Profit Margin = 40%.Markup = 66.67%.
Common Applications
- E-commerce retail product pricing strategy.
- Wholesale distributor contract negotiations.
- Small business cash flow budgeting.
Assumptions & Rounding Policy
- Excludes general overhead, income taxes, and variable fulfillment expenses unless included in cost.
- Percentages round to two decimal places.
Frequently Asked Questions
What is the key difference between Margin and Markup?
Margin is profit divided by selling price (never exceeding 100%), whereas Markup is profit divided by cost (can exceed 100%).
Can profit margin be negative?
Yes, if selling price is less than cost, the margin is negative (indicating a net operating loss per unit).
Notice: Gross margin calculations reflect top-line unit economics. Net margins after administrative, tax, and marketing expenses will be lower.