How to use the Profit Margin Calculator
Margin = profit ÷ selling price. Markup = profit ÷ cost. A product that costs 40 and sells for 65 has a 38.5% margin but a 62.5% markup, a common source of pricing mistakes.
To hit a target margin, price = cost ÷ (1 − margin).
Frequently asked questions
What is a good profit margin?
It depends on the industry: grocery retail often runs under 5% net, while software and digital products can exceed 70% gross.
Margin vs markup: which do I use?
Use margin to understand profitability; use markup when setting prices from cost.