Profit Margin Calculator
Enter what something costs you and what you sell it for, and you'll instantly see your gross profit margin and markup. Useful whether you're pricing products for the first time or checking if an existing product is actually worth selling.
How to use
- Enter the cost price - what you paid for it or spent making it.
- Enter the selling price (revenue per unit).
- Hit Calculate and you'll see your profit margin %, markup %, and raw profit in rupees.
- Gross margin is profit divided by revenue - not the same as markup, which is profit over cost.
Related tools:
Profit margin tells you what percentage of your revenue actually stays with you after costs. Gross margin just looks at revenue minus cost of goods sold (COGS) - it ignores operating expenses. Net margin factors everything in: COGS, salaries, rent, taxes, and other costs. A business can have a healthy gross margin but a razor-thin net margin if overhead is high.
For freelancers, the 'cost' is usually your time at a base rate plus any tool costs, and revenue is what you charged the client. For product sellers, it's the production cost plus marketplace fees vs. the sale price. Either way, if your margin is below 10-15%, it's worth looking at where the money is going - often it's shipping, returns, or platform fees that quietly eat into revenue.
Frequently Asked Questions
What's a good profit margin for a small business?
It depends on the industry. Net profit margins of 10-20% are generally solid for most small businesses. Retail typically runs at 2-5% net; software and digital products can be 30-50%+. Compare against industry benchmarks for a meaningful read.
How is gross profit margin different from net profit margin?
Gross margin = (revenue - COGS) / revenue x 100. It only deducts the direct cost of making or buying the product. Net margin deducts all expenses including salaries, rent, taxes, and interest. Net margin is a more complete picture of actual profitability.
Can I use revenue and cost in any currency?
Yes - as long as both numbers are in the same currency and unit, the percentage result is the same regardless of whether you're using rupees, dollars, or any other currency.
Why is my margin percentage different from the markup percentage?
Markup is cost-based; margin is revenue-based. For the same numbers, they always produce different percentages. Selling at Rs.1,000 what costs Rs.600 gives a 40% markup but only a 40% margin? No - it's a 66.7% markup and a 40% margin. Always specify which you mean when talking to accountants or investors.