Margin Calculator
Calculate profit margin %, or find selling price from cost and a target margin
Profit Margin Formula
Margin vs Markup: Margin uses revenue as the base. Markup uses cost as the base. A 40% margin = 67% markup. Always clarify which one you mean in business discussions.
Industry Profit Margin Benchmarks
| Industry | Typical Gross Margin | Net Margin |
|---|---|---|
| Software / SaaS | 60–80% | 15–25% |
| Consulting | 50–70% | 20–35% |
| E-commerce / Retail | 25–50% | 2–5% |
| Manufacturing | 20–35% | 5–10% |
| Grocery / Food | 20–30% | 1–3% |
| Restaurants | 60–70% | 3–9% |
| Construction | 15–25% | 2–5% |
| Healthcare | 40–60% | 5–15% |
| Automotive | 10–20% | 2–6% |
Margin vs Markup — Key Difference
Margin
Based on revenue.
((Sell − Cost) ÷ Sell) × 100
Used by accountants and retailers.
Cost $60, Sell $100 → 40% margin
Markup
Based on cost.
((Sell − Cost) ÷ Cost) × 100
Used by wholesalers and manufacturers.
Cost $60, Sell $100 → 67% markup
| Margin % | Selling Price (Cost $100) | Profit | Equivalent Markup |
|---|---|---|---|
| 10% | $111 | $11 | 11.1% |
| 20% | $125 | $25 | 25% |
| 25% | $133 | $33 | 33.3% |
| 30% | $143 | $43 | 42.9% |
| 40% | $167 | $67 | 66.7% |
| 50% | $200 | $100 | 100% |
| 60% | $250 | $150 | 150% |
Frequently Asked Questions
How do I calculate profit margin?
Formula: ((Revenue − Cost) ÷ Revenue) × 100. If you sell a product for $100 and it costs $60 to make, your margin is ((100−60)÷100)×100 = 40%.
What is a good profit margin?
It depends on the industry. Software: 15–25% net margin is excellent. Retail: 2–5% net is typical. Consulting: 20–35%. For gross margin, anything above 50% gives strong pricing flexibility.
What is the difference between gross margin and net margin?
Gross margin = (Revenue − COGS) ÷ Revenue. Net margin = Net profit ÷ Revenue (after all expenses: rent, salaries, taxes). This calculator computes gross margin.
How do I find the selling price if I want a 40% margin?
Use "Find Selling Price" mode. Formula: Selling Price = Cost ÷ (1 − 0.40). If your cost is $60: $60 ÷ 0.60 = $100. This gives you a 40% margin.
Why is margin always lower than markup for the same product?
Margin uses the larger revenue number as the base, so the ratio looks smaller. Markup uses the smaller cost as the base, giving a larger ratio. Cost $60, Sell $100: margin = 40% but markup = 66.7%.