Profit margin calculator

See exactly how much you keep on every sale.

Your margin appears right here as you type — or press the button to try example numbers.

Good to know

What profit margin tells you

Gross margin is the share of every sale you keep after paying for the product itself: (price minus cost) divided by price. Sell a candle for $20 that costs $8 to make and you keep $12, a 60% margin. This number decides whether your business can survive, since rent, marketing, and your pay come out of what's left.

What your margin number means

Enter your unit cost and selling price to see your gross margin and profit per unit instantly. Or flip it: enter your cost and the margin you want, and the calculator solves the price to charge. Turn on the advanced toggle to add shipping and ad costs, since a healthy 54% margin can fall under 20% once those eat into a sale.

Margin vs. markup: not the same number

Margin and markup use the same two numbers but answer different questions, and mixing them up is a common pricing mistake. Margin is profit as a percent of price; markup is profit as a percent of cost. Marking up an $8 product by 50% gives a $12 price, but that's only a 33.3% margin, not 50%.

A worked example

Say you roast coffee: a bag costs $6.50 to make and sells for $14, so profit is $7.50 and gross margin is 53.6%, solid for specialty food. Now add the real cost of selling it: free shipping runs $2.10 an order and ads cost $3 per order won. True profit drops to $2.40, and true margin falls to 17.1%.

What to do with your margin

Compare your number to your industry before judging it: grocery runs 25–35%, apparel 40–60%, restaurants 65–70%, software often above 80%. A good margin is one that covers your fixed costs at a sales volume you can realistically hit. If yours is too thin, raise the price, cut the unit cost, or improve the offer.

Frequently asked questions

How do I calculate profit margin?

Margin = (price − cost) ÷ price × 100. A $14 item costing $6.50 has a (14 − 6.50) ÷ 14 × 100 = 53.6% margin.

What is a good profit margin for a small business?

It depends on industry: grocery ~25–35%, apparel 40–60%, restaurants 65–70%, software 80%+. It should cover your fixed costs.

What is the difference between gross margin and net margin?

Gross margin subtracts only product cost. Net margin also subtracts rent, wages, marketing, and taxes. This tool calculates gross margin.

Can profit margin be negative?

Yes. If price is below cost, every sale loses money. The calculator shows negative margins in red so you catch it before launch.

Is margin the same as markup?

No. Margin is profit as % of price; markup is profit as % of cost. A 50% markup on $8 gives a $12 price but only a 33.3% margin.

Do you store the numbers I enter?

No. It runs entirely in your browser: nothing is stored, sent to a server, or shared.

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