Calculate gross profit margin, net profit margin, or product markup in seconds. Essential for pricing decisions, financial analysis, and business planning.
Gross Profit Margin
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Revenue—
Cost of Goods Sold (COGS)—
Gross Profit—
Net Profit Margin
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Total Revenue—
Net Profit—
Net Margin %—
Selling Price
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Cost Price—
Profit (Markup Amount)—
Gross Margin % (on selling price)—
Markup vs Margin: Markup is % of cost. Margin is % of revenue. A 50% markup equals a 33.3% gross margin.
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How to Use the Profit Margin Calculator
Gross Margin: Enter revenue and COGS. Gross margin shows profitability before operating expenses.
Net Margin: Enter total revenue and final net profit (after all expenses and taxes). Shows bottom-line profitability.
Markup: Enter cost and your desired markup %. Get the selling price and equivalent gross margin %.
Frequently Asked Questions
Profit Margin is calculated as a percentage of the selling price (revenue). Markup is calculated as a percentage of the cost price. Example: Buy at $100, sell at $150. Markup = 50% (50/100). Gross Margin = 33.33% (50/150). They represent the same profit but from different bases.
Profit margins vary significantly: Software/SaaS: Net margin 20–30%+. Retail (FMCG): Net margin 2–5%. Restaurants: Net margin 3–9%. Pharmaceuticals: Net margin 15–25%. Construction: Net margin 2–6%. E-commerce: Net margin 1–5%. A "good" margin depends on your industry — always benchmark against sector peers.
Gross Profit = Revenue − Cost of Goods Sold (COGS). It excludes operating expenses like salaries, rent, and marketing. Net Profit = Revenue − All expenses (COGS + operating costs + taxes + interest). Net profit is your true bottom-line earnings.
You can improve margins by: (1) Increasing selling price — negotiate better terms or add value. (2) Reducing COGS — better supplier deals, bulk purchasing, or process efficiency. (3) Cutting operating expenses — automate, outsource non-core tasks. (4) Focusing on high-margin products/services in your portfolio mix.