Calculate gross, operating, and net profit margins
Enter revenue and cost to find your profit margins
Calculate gross, operating, and net profit margins
Understand the difference and convert between them
Markup is the percentage added to the cost to get the selling price.
Price = Cost × (1 + Markup%)
Margin is the percentage of the selling price that is profit.
Margin = Profit ÷ Price × 100
| Markup % | Margin % | Example (Cost $100) |
|---|---|---|
| 15% | 13.0% | Sell at $115, profit $15 |
| 25% | 20.0% | Sell at $125, profit $25 |
| 33.3% | 25.0% | Sell at $133, profit $33 |
| 50% | 33.3% | Sell at $150, profit $50 |
| 100% | 50.0% | Sell at $200, profit $100 |
| 200% | 66.7% | Sell at $300, profit $200 |
Calculate the right price based on cost and desired margin
See prices at different margin levels for your cost
Formulas, concepts, and industry benchmarks
Revenue minus the direct costs (COGS) of producing goods/services. Shows profitability before overhead.
Gross profit minus operating expenses. Shows profitability from core business operations.
Total profit after all expenses including interest and taxes. The "bottom line."
Cost of Goods Sold - direct costs attributable to production: materials, direct labor, manufacturing overhead.
| Industry | Gross Margin | Net Margin |
|---|---|---|
| Software/SaaS | 70-85% | 15-25% |
| Consulting | 60-80% | 15-20% |
| Restaurants | 55-65% | 3-9% |
| Retail - General | 25-45% | 2-5% |
| Retail - Grocery | 25-30% | 1-3% |
| Manufacturing | 25-35% | 5-10% |
| E-commerce | 40-60% | 5-10% |
Profit margins reveal the health and efficiency of your business.
Strategies to increase your profit margins:
Common points of confusion:
Interactive charts to help visualize profit margin concepts