Free tool

Profit margin calculator, margin and markup.

Gross margin = (price − cost) ÷ price. Enter your cost and price to see margin, markup and profit.

Your result

Gross margin30.0%

Profit per item: ₦3,000.00
Markup on cost: 42.9%
Revenue (1 sold): ₦10,000.00
Gross profit (1 sold): ₦3,000.00

How to use it

Pick your currency
Choose naira, cedi, shilling, rand, pound or dollar.
Enter the cost per item
What it costs you to make or buy one, including anything you pay per sale.
Enter the selling price
The price before VAT or sales tax.
Read margin and markup
Margin is profit as a share of price; markup is profit as a share of cost. Add a quantity to see the batch total.

Margin and markup are not the same

Buy for 7,000 and sell for 10,000 and you make 3,000. As a margin that is 30% (3,000 ÷ 10,000). As a markup it is 42.9% (3,000 ÷ 7,000). Price with a 30% markup when you meant a 30% margin and you earn 23% instead, which is how many small businesses underprice without noticing.

Markup on cost	Equals margin
25%	20%
33.3%	25%
50%	33.3%
66.7%	40%
100%	50%

Gross margin vs net margin

Gross margin only counts the cost of the item. Net margin also subtracts running costs like rent, salaries and data. A product can have a healthy gross margin while the business still makes a loss, so check both every month.

Questions, answered.

What is a good profit margin?

It depends on the trade. Supermarkets live on thin margins and high volume; services and made-to-order products often need 40% or more to cover time and overheads. Compare with your own costs, not someone else's industry average.

How do I calculate profit margin?

Subtract cost from price to get profit, divide profit by price, then multiply by 100. Cost 7,000 and price 10,000 gives (3,000 ÷ 10,000) × 100 = 30%.

How do I turn a margin into a price?

Divide the cost by (1 − margin). For a 40% margin on a 6,000 cost: 6,000 ÷ 0.6 = 10,000. The pricing calculator does this for you.

Can Profynix track margins for me?

Yes. Profynix records costs and sales as they happen and reports gross margin by product and period in plain words.