Price = cost ÷ (1 − margin%). To hit a 40% margin on a $60 item, sell at $100. Enter your cost and desired margin to get the price.
What is Profit Margin Calculator?
Profit margin is the percentage of revenue you keep after costs. It's the number that decides whether growth is actually making you money — you can scale revenue endlessly and still go broke if the margin math doesn't work.
How it works
Profit margin = ((revenue − cost) ÷ revenue) × 100. Sell for $100 with $60 of cost and you keep $40, a 40% margin. The calculator handles gross margin (before overhead) and helps you see the effect of price and cost changes.
How to use this tool
Enter revenue (or selling price) and cost. The tool returns your profit and margin percentage. Model different price points to see how much room you really have for discounts and ad spend.
Why it matters
Margin sets the ceiling on what you can spend to acquire a customer. A 20% margin business and a 60% margin business need completely different marketing strategies. Know yours before you set ad budgets or run promotions.
Frequently asked questions
What is a good profit margin?
It's highly industry-dependent — grocery runs single digits, software can exceed 80%. Compare to your sector and, more importantly, track whether yours is trending up or down.
What's the difference between margin and markup?
Markup is profit as a percentage of cost; margin is profit as a percentage of revenue. A 50% markup is only a 33% margin — mixing them up is a common, costly mistake.
How do I increase profit margin?
Raise prices, lower cost of goods, cut waste, improve product mix toward higher-margin items, or increase average order value. Small margin gains compound powerfully at scale.