Margin Calculator

Q: What is gross margin?

Gross margin is profit expressed as a percentage of the selling price. Formula: (Selling Price − Cost) ÷ Selling Price × 100. A $50 cost on an $80 product gives a 37.5% margin.

Q: What is the difference between margin and markup?

Margin is profit ÷ selling price. Markup is profit ÷ cost. A 50% markup on a $50 cost gives a $75 price and a 33.3% margin. They use the same profit but different denominators — margin is always lower than markup (for the same transaction).

Q: What is a good profit margin?

It varies by industry. Grocery retail averages 1–3%. Software/SaaS can be 70–90%. Most retail products target 40–60% gross margin to cover operating expenses and still turn a profit.

Q: How do I find the selling price for a target margin?

Use "Find Price" mode: enter your cost and desired margin %. Formula: Selling Price = Cost ÷ (1 − Margin%). For a 40% margin on a $60 cost: $60 ÷ (1 − 0.40) = $100.

Q: How do I convert markup to margin?

Margin = Markup ÷ (1 + Markup). Example: 50% markup → 50 ÷ 150 = 33.3% margin.

Calculate gross margin and markup from cost and price, or work backwards to find the selling price needed to hit your target margin. Profit health indicator included.

Cost Price

Selling Price

Gross Margin

37.50%

Healthy

Markup %

60.00%

Profit

$30.00

($30.00 ÷ $80.00) × 100 = 37.50%

Margin vs. Markup — What's the Difference?

Common mistake: Margin and markup are often confused, but they are calculated differently and can lead to serious pricing errors if mixed up.

	Margin	Markup
Formula	Profit ÷ Selling Price × 100	Profit ÷ Cost × 100
Denominator	Selling price (revenue)	Cost
Range	Always < 100%	Can exceed 100%
Example (Cost $50, Price $80)	($30 ÷ $80) × 100 = 37.5%	($30 ÷ $50) × 100 = 60%
Used by	Accountants, retailers, CFOs	Wholesalers, product pricing

Typical Gross Margins by Industry

Industry	Typical Gross Margin
Grocery / supermarket	1–3%
Gas station (fuel)	1–5%
Online retail	20–40%
Apparel / clothing	40–60%
Restaurant	60–70%
SaaS / software	70–90%
Jewelry	42–47%
Consumer electronics	10–25%

Frequently Asked Questions

What is gross margin? ▼

Gross margin is profit expressed as a percentage of the selling price. Formula: (Selling Price − Cost) ÷ Selling Price × 100. A $50 cost on an $80 product gives a 37.5% margin.

What is the difference between margin and markup? ▼

Margin is profit ÷ selling price. Markup is profit ÷ cost. A 50% markup on a $50 cost gives a $75 price and a 33.3% margin. They use the same profit but different denominators — margin is always lower than markup (for the same transaction).

What is a good profit margin? ▼

It varies by industry. Grocery retail averages 1–3%. Software/SaaS can be 70–90%. Most retail products target 40–60% gross margin to cover operating expenses and still turn a profit.

How do I find the selling price for a target margin? ▼

Use "Find Price" mode: enter your cost and desired margin %. Formula: Selling Price = Cost ÷ (1 − Margin%). For a 40% margin on a $60 cost: $60 ÷ (1 − 0.40) = $100.

How do I convert markup to margin? ▼

Margin = Markup ÷ (1 + Markup). Example: 50% markup → 50 ÷ 150 = 33.3% margin.

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