Margin Calculator
Calculate profit margin, gross margin, and net margin percentages. Analyze business profitability with revenue, cost, and markup calculations for pricing decisions.
Revenue & Cost
Selling price / revenue per unit
Cost of goods sold per unit
Profitability Analysis
Profit Analysis
How to Use the Margin Calculator
Enter your revenue (selling price) and cost (COGS). The calculator shows your profit margin percentage, profit per unit, and equivalent markup percentage.
Profit Margin Formula
Profit = Revenue - Cost
Margin % = (Profit ÷ Revenue) × 100
Markup % = (Profit ÷ Cost) × 100
Example: $150 revenue, $100 cost
Profit = $50
Margin = ($50 ÷ $150) × 100 = 33.3%
Markup = ($50 ÷ $100) × 100 = 50%
Understanding Margin vs Markup
| Cost | Price | Margin | Markup |
|---|---|---|---|
| $100 | $125 | 20% | 25% |
| $100 | $150 | 33.3% | 50% |
| $100 | $200 | 50% | 100% |
| $100 | $300 | 66.7% | 200% |
Profit Margin by Industry
| Industry | Gross Margin | Net Margin |
|---|---|---|
| Software (SaaS) | 80-90% | 10-20% |
| Consulting | 40-60% | 10-20% |
| Manufacturing | 20-40% | 5-15% |
| Retail | 25-50% | 2-5% |
| Restaurants | 60-70% | 3-5% |
| Grocery Stores | 25-30% | 1-3% |
| Automotive | 10-15% | 2-4% |
Improving Your Profit Margin
- Increase Prices: Raise prices gradually (2-5%) - most customers won't notice
- Reduce Costs: Negotiate with suppliers, buy in bulk, reduce waste
- Improve Efficiency: Automate processes, reduce labor costs, optimize operations
- Product Mix: Focus on high-margin products, eliminate low-margin items
- Value-Added Services: Offer premium services with higher margins
- Reduce Returns: Better quality control reduces costly returns
- Upselling: Train staff to sell higher-margin add-ons
- Volume Discounts: Purchase larger quantities for better supplier pricing
Break-Even Analysis
To calculate units needed to break even with fixed costs:
Break-Even Units = Fixed Costs ÷ Profit per Unit
Example: $10,000 monthly fixed costs, $50 profit/unit → Need 200 units/month to break even