Margin Calculator
Calculate profit margin, markup, and gross profit — solve for any missing value.
Margin vs markup: what's the difference?
Both margin and markup measure profitability, but from different bases. Gross margin is profit as a percentage of revenue (the selling price). Markup is profit as a percentage of cost. If you buy an item for $50 and sell it for $100, the profit is $50. The gross margin is 50% ($50 ÷ $100) but the markup is 100% ($50 ÷ $50). Confusing margin with markup is one of the most common pricing errors in retail.
Frequently asked questions
What is a good gross margin?
It varies enormously by industry. Software companies often achieve 70–90% gross margins because the cost of delivering software is low. Grocery retail runs at 20–30%. Manufacturing is typically 30–50%. Service businesses vary widely. Compare your margin to industry benchmarks rather than a universal ideal.
What's the formula to convert markup to margin?
Margin = Markup ÷ (1 + Markup). For example, a 25% markup: 0.25 ÷ 1.25 = 20% margin. Conversely, Markup = Margin ÷ (1 − Margin). A 20% margin: 0.20 ÷ 0.80 = 25% markup. The calculator handles this conversion automatically.
What's the difference between gross margin and net margin?
Gross margin only deducts the direct cost of goods sold (COGS) from revenue. Net margin deducts all expenses — COGS, operating expenses, interest, taxes, and any other costs. This calculator computes gross margin. To calculate net margin, you would need to know all operating costs, not just the product cost.
