Free Tool
Profit Margin Calculator
Calculate profit margins, markup percentages, and find the right pricing strategy for your products. Ensure healthy profitability while staying competitive in your market.
Calculate Profit Margins
$
Include materials, labor, shipping to you, etc.
$
Profit Margin
0.0%
Markup
0.0%
Selling Price
$0.00
Profit per Unit
$0.00
Break-even Analysis
$
Rent, salaries, utilities, software subscriptions, etc.
Pricing Scenarios
Industry Benchmarks
Fashion & Apparel
Typical margin range
40%+
Below benchmark
Electronics
Typical margin range
25%+
Below benchmark
Health & Beauty
Typical margin range
50%+
Below benchmark
Software/Digital
Typical margin range
70%+
Below benchmark
Food & Beverage
Typical margin range
30%+
Below benchmark
Pricing Strategy Tips
- Research competitor pricing before setting your prices
- Factor in all costs: shipping, returns, payment processing
- Test different price points to find optimal conversion
- Use psychological pricing ($9.99 vs $10.00)
Understanding Profit Margins vs Markup
Learn the difference and when to use each metric for your pricing strategy
%
Profit Margin
Profit margin shows what percentage of your selling price is profit. It's calculated as: (Selling Price - Cost) ÷ Selling Price × 100
Example: $30 selling price - $20 cost = $10 profit
$10 ÷ $30 = 33.3% profit margin
$10 ÷ $30 = 33.3% profit margin
+
Markup
Markup shows how much you're adding to your cost to get the selling price. It's calculated as: (Selling Price - Cost) ÷ Cost × 100
Same example: $30 selling price - $20 cost = $10 profit
$10 ÷ $20 = 50% markup
$10 ÷ $20 = 50% markup
Quick Reference: Margin vs Markup
| Markup | Margin | Example (Cost: $100) |
|---|---|---|
| 50% | 33.3% | Selling Price: $150 |
| 100% | 50% | Selling Price: $200 |
| 150% | 60% | Selling Price: $250 |
| 200% | 66.7% | Selling Price: $300 |
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