💰 Profit Margin Calculator
Calculate gross profit, profit margin percentage, markup, and revenue from cost and selling price.
💰 Profit Margin Calculator
📊 Profit Analysis
Profit Margin Calculator – A Business Essential
Understanding your profit margin is crucial for any business. It tells you how efficiently you're converting revenue into profit. A healthy margin means your business is sustainable; a low margin signals the need to cut costs or adjust pricing.
Key Profit Metrics Explained
Gross Profit Margin
Markup Percentage
Return on Investment (ROI)
Margin vs Markup — Key Difference
Margin is profit as a percentage of selling price. Markup is profit as a percentage of cost price. They are related but not equal — a 25% margin equals a 33.3% markup.
Industry Profit Margin Benchmarks
- Retail: 2–5% net margin
- Restaurants: 3–9% net margin
- Software/SaaS: 15–30% net margin
- Consulting: 20–40% net margin
- E-commerce: 5–15% net margin
How to Improve Profit Margins
- Reduce cost of goods sold (COGS)
- Increase prices strategically
- Focus on high-margin products
- Reduce operational expenses
- Increase sales volume
Frequently Asked Questions
A "good" profit margin varies by industry. Generally, a 10% net margin is considered average, 20% is good, and 30%+ is excellent. However, some industries (like grocery retail) operate on 1-3% margins while software companies can achieve 50%+.
Margin = Profit ÷ Selling Price. Markup = Profit ÷ Cost Price. If cost = ₹100 and selling price = ₹125: Margin = 25/125 = 20%, Markup = 25/100 = 25%. They measure the same profit but from different bases.
Use the "Find Selling Price" mode. Enter your cost price and desired margin %. The formula is: Selling Price = Cost Price ÷ (1 − Margin%). For 30% margin on ₹1000 cost: 1000 ÷ 0.70 = ₹1428.57.
Yes. A negative profit margin means you're selling below cost and losing money on every sale. This might be a short-term strategy for customer acquisition but is unsustainable long-term.