Margin Calculator
Enter cost and selling price to instantly calculate profit margin, profit amount, and markup percentage.
How to calculate margin
If you buy a product for $60 and sell it for $100, your profit is $40. Dividing $40 by $100 gives a 40% margin.
Margin vs Markup
Margin and markup both measure profitability but use different denominators. Margin is based on the selling price, while markup is based on the cost.
| Metric | Formula | Example (cost $60, price $100) |
|---|---|---|
| Margin | Profit ÷ Revenue | $40 ÷ $100 = 40% |
| Markup | Profit ÷ Cost | $40 ÷ $60 = 66.67% |
A 50% markup equals a 33.3% margin. Margin is always lower than markup for the same transaction.
Common margins by industry
| Industry | Typical profit margin |
|---|---|
| Grocery stores | 1–3% |
| Restaurants | 3–9% |
| Retail (clothing) | 4–13% |
| Manufacturing | 5–10% |
| SaaS / Software | 70–90% |
| Consulting / Services | 15–25% |
| Real estate | 15–20% |
| Financial services | 15–35% |
Frequently asked questions
What is profit margin?
Profit margin is the percentage of revenue that remains as profit after subtracting costs. It is calculated as (Revenue − Cost) ÷ Revenue × 100. For example, if you sell a product for $100 that costs $60, your margin is 40%.
What is the difference between margin and markup?
Margin is profit divided by the selling price (revenue), while markup is profit divided by the cost. A 50% markup on a $100 cost gives a $150 price and a 33.3% margin. Margin is always lower than markup for the same transaction.
What is a good profit margin?
A good profit margin varies by industry. Grocery stores operate on 1–3% margins, while SaaS companies can achieve 70–90%. Generally, a net profit margin above 10% is considered healthy for most businesses.
How do I increase my profit margin?
You can increase profit margin by raising prices, reducing cost of goods sold, improving operational efficiency, or shifting your product mix toward higher-margin items. Reducing waste and negotiating better supplier terms also help.