What is profit margin?

Profit margin measures how much profit you make from each sale after deducting costs.

How is profit margin calculated?

Profit margin equals profit divided by selling price, expressed as a percentage.

Markup is the percentage added to the product cost to determine its selling price.

Is markup the same as margin?

No. Markup is based on cost, while profit margin is based on the selling price.

What is a good profit margin?

A good margin depends on your industry, but higher margins generally provide greater financial flexibility.

Can I calculate gross profit?

Yes. Gross profit is your selling price minus the direct cost of producing or purchasing the product.

Should shipping costs be included?

Yes. Including shipping and other expenses gives a more accurate estimate of profitability.

Can I use this for ecommerce?

Yes. It works well for online stores, Amazon sellers, and other ecommerce businesses.

Why is profit margin important?

Profit margin helps evaluate pricing strategies and overall business profitability.

Can I compare different pricing options?

Yes. Adjusting selling prices allows you to compare margins before making pricing decisions.

Business Tool

Profit Margin Calculator

Used by online sellers to input product cost and markup percentage to instantly find net profit margin.

Product details

Product cost ($)

Selling price ($)

Additional costs (shipping, fees) ($)

Profit analysis

Profit margin

50.00%

Markup

150.00%

Total cost: $25
Profit per unit: $25
Break-even price: $25

How to use this calculator

1
Enter your product cost
Input what it costs you to produce or acquire the product.
2
Enter your selling price
Input the price you charge customers for the product.
3
Add any additional costs
Include shipping, platform fees, or other per-unit expenses.
4
Review your margin and markup
See your profit margin percentage, markup, and profit per unit.

Frequently asked questions about Profit Margin Calculator

What is profit margin?: Profit margin measures how much profit you make from each sale after deducting costs.
How is profit margin calculated?: Profit margin equals profit divided by selling price, expressed as a percentage.
What is markup?: Markup is the percentage added to the product cost to determine its selling price.
Is markup the same as margin?: No. Markup is based on cost, while profit margin is based on the selling price.
What is a good profit margin?: A good margin depends on your industry, but higher margins generally provide greater financial flexibility.
Can I calculate gross profit?: Yes. Gross profit is your selling price minus the direct cost of producing or purchasing the product.
Should shipping costs be included?: Yes. Including shipping and other expenses gives a more accurate estimate of profitability.
Can I use this for ecommerce?: Yes. It works well for online stores, Amazon sellers, and other ecommerce businesses.
Why is profit margin important?: Profit margin helps evaluate pricing strategies and overall business profitability.
Can I compare different pricing options?: Yes. Adjusting selling prices allows you to compare margins before making pricing decisions.

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Embed this calculator on your site

Copy and paste this code into your website's HTML (WordPress, Webflow, custom HTML, etc.) to display this calculator.

<!-- CalculateAway Widget -->
<div class="calculateaway-embed" data-tool="profit-margin" style="width: 100%; max-width: 800px; margin: 0 auto;"></div>
<script src="https://calculateaway.com/api/widget" async></script>