How to Use the Margin Calculator
Choose a calculation mode: enter cost and revenue to calculate margin, or set a target margin to determine the required selling price. Add operating expenses to calculate net profit.
Margin vs Markup: What's the Difference
Margin is profit as a percentage of selling price. If you sell a product for $100 with $30 profit, the margin is 30%.
Markup is profit as a percentage of cost. With a cost of $70 and profit of $30, the markup is 43%.
With the same absolute profit, markup is always higher than margin. This is important to consider when pricing.
Formulas
- Margin = (Revenue − Cost) ÷ Revenue × 100%
- Markup = (Revenue − Cost) ÷ Cost × 100%
- Selling Price = Cost ÷ (1 − Margin%)
- Break-even = Fixed Costs ÷ Profit per Unit
What's a Good Profit Margin
Average margins by industry:
- Retail: 20-50%
- Services: 50-80%
- Manufacturing: 10-30%
- IT and SaaS: 70-90%
Compare with competitors in your niche rather than general market averages.