Calculate profit margin, cost, revenue, and selling price for your products.
This Profit Margin Calculator helps you evaluate pricing decisions instantly. Enter your product cost, selling price, and monthly sales volume to see profit per unit, profit margin, markup percentage, cost ratio, and projected monthly profit and revenue. Use it to price products correctly, compare margins across your catalogue, and understand how changes in cost or price affect your bottom line.
Pricing a product is one of the most consequential decisions a business makes, and it is one that most people get wrong in the same direction — they price too low. Not out of generosity, but because they focus on the cost of the product and add what feels like a reasonable amount on top, without running the actual numbers on margin, markup, and monthly profitability. This calculator puts those numbers in front of you instantly so every pricing decision is grounded in arithmetic rather than intuition.
These two terms are used interchangeably in casual conversation but they measure completely different things, and confusing them leads to systematic underpricing.
Profit expressed as a percentage of the selling price. If you sell for $100 and your cost is $60, your profit is $40 and your margin is 40%. Margin tells you what share of each sale you keep — always calculated against revenue.
Profit expressed as a percentage of the cost. On the same product — $100 selling price, $60 cost — the markup is 66.7%. Markup tells you how much above cost you are pricing — always calculated against cost.
A 50% markup does not produce a 50% margin. A $60 product marked up by 50% sells for $90. The margin on that $90 sale is 33.3%, not 50%. Sellers who target a 50% margin but calculate using markup end up with margins significantly lower than intended. This calculator shows both figures simultaneously so you always know exactly what your pricing produces in both terms.
The raw dollar amount you earn from each sale after deducting the product cost. This is the per-unit contribution to your business. Multiply it by monthly units sold to understand the real revenue picture.
Per-unit profit as a percentage of selling price. The most widely used metric for comparing profitability across products, pricing tiers, and businesses. A 40% margin retains 40 cents of every dollar in revenue as profit.
Per-unit profit as a percentage of cost. Useful for pricing decisions — if you know your cost and need to hit a target margin, working backward through markup percentage gives you the right selling price.
Cost expressed as a percentage of selling price — the inverse of margin. A cost ratio of 60% means 60 cents of every revenue dollar goes toward the product cost. Combined with margin, it gives a complete picture of how each dollar is divided.
Profit per unit multiplied by monthly sales volume. The number that actually matters for running a business — not what you make per unit in isolation, but what that translates to across the volume you are moving each month.
Selling price multiplied by monthly units — your top-line monthly figure. Alongside monthly profit, it tells you the ratio of revenue that converts to actual profit at your current pricing and volume.
There is no universal answer — it depends entirely on the industry, the business model, and the cost structure. But some benchmarks help orient the conversation.
Retail and e-commerce
Typically operate on gross margins of 30 to 50%. Physical product businesses with manufacturing and logistics costs often settle at 20 to 40%, while the starting point needs room to absorb advertising, returns, and platform fees.
Software and digital products
Can reach 70 to 90% margins because the cost of delivering each additional unit is near zero. Once the product is built, each new sale carries almost no variable cost.
Amazon and marketplace sellers
Gross margins of 25 to 35% before advertising are generally considered healthy. Advertising spend, platform fees, and returns erode margin significantly, so the starting point needs to be high enough to absorb these costs.
Direct-to-consumer brands
A gross margin of 60% or higher is typically required to cover marketing costs, customer acquisition, and overheads while leaving a meaningful net margin after all downstream costs.
Finding the right selling price for a target margin
Decide your target margin first — say 40%. If your cost is $35, the selling price that produces a 40% margin is cost ÷ (1 − target margin) = $35 ÷ 0.60 = $58.33. Enter $58.33 as the selling price to verify the output matches your target.
Comparing margins across your product catalogue
Run this calculator for each product you sell. Products with thin margins that move high volume can be less profitable overall than products with strong margins at lower volume. Monthly profit is the number to compare, not margin in isolation.
Evaluating a cost increase from a supplier
If your supplier increases cost from $40 to $46, enter both scenarios and see how margin changes. A $6 cost increase on a $75 product drops margin from 46.7% to 38.7% — telling you whether you need to raise the selling price and by how much.
Stress-testing your pricing against discounts
If you plan to run a 15% promotional discount, enter the discounted price and see how margin and profit change. This prevents promotions that look attractive to customers but quietly destroy the economics of the sale.
Pricing based on competitors without knowing your own costs
A competitor's price is only relevant if your cost structure is similar. If their product cost is lower than yours, matching their price produces a lower margin for you — possibly a loss.
Targeting markup when you mean margin
If your business targets a 40% margin and you are calculating 40% markup, you are systematically underpricing every product. The calculator shows both figures so you always know which one you are working with.
Ignoring volume in margin analysis
A product with a great margin that barely sells produces less actual profit than a product with a thin margin that moves significant volume. Monthly profit brings these two dimensions together into a single number.
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Profit margin is calculated using the formula: Profit Margin = (Profit ÷ Revenue) × 100. Profit is the difference between selling price and total cost.
A profit margin calculator is a tool that helps you quickly calculate profit, margin percentage, and markup based on your cost and selling price.
Enter your cost and selling price into a profit margin calculator. It will automatically compute your profit and margin percentage using standard formulas.
A 30% profit margin means you keep 30% of your revenue as profit after covering all costs. For example, on a $100 sale, you earn $30 profit.
A 10% net profit margin means your net income is 10% of total revenue after all expenses, including operating costs, taxes, and interest.
A 75% profit margin means 75% of the selling price is profit. For example, if you sell a product for $100, your profit is $75 and cost is $25.
A 100% profit margin means your profit equals your cost. For example, if a product costs $50 and you sell it for $100, you achieve a 100% markup and a 50% margin.
A true 100% profit margin is not practically possible because it would mean zero cost. However, a 100% markup is possible when the selling price is double the cost.
A normal profit margin varies by industry. Retail businesses often have margins between 5% and 20%, while software and digital products can have much higher margins.
10% profit of 20,000 is 2,000. This is calculated by multiplying 20,000 × 0.10.
* This calculator is for general planning and estimation. For tax purposes, cost accounting, and financial reporting, always work with qualified accounting professionals.