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Profit Margin & Markup Calculator
Accurately determine gross profit, profit margin percentages, markup rates, and target selling prices for your products.
Pricing Inputs
$
$
%
%
$
Profitability Analytics
Gross Profit Per Unit
$35.00
41.2% Margin
70.0% Markup
Target Selling Price
$85.00
Product Cost (COGS)
$50.00
Net Profit (After $10 Overhead)
29.4% Net Margin
$25.00
Cost: 58.8%
Profit: 41.2%
Margin vs. Markup Quick Reference Table
| Markup on Cost | 15% | 25% | 33.3% | 50% | 75% | 100% (Keystone) | 200% |
|---|---|---|---|---|---|---|---|
| Gross Margin on Revenue | 13.0% | 20.0% | 25.0% | 33.3% | 42.9% | 50.0% | 66.7% |
Profit Margin vs. Markup: The Crucial Difference
The terms profit margin and markup are often mistakenly used interchangeably, leading to serious retail pricing errors. While both describe the relationship between cost and profit, profit margin measures how much of every dollar of sales you keep, whereas markup measures how much you add to your wholesale purchase cost.
Key Capabilities & Features
- 3 Intuitive Modes: Solve for profit margin, required selling price from margin, or target markup.
- Net Profit Accounting: Include overhead, shipping, and advertising costs to reveal true bottom-line net margins.
- Visual Breakdown Bar: Real-time proportional display of cost of goods sold versus retained gross profit.
- Standard Keystone Reference: Quick comparison table translating standard retail markups into gross margin percentages.
Step-by-Step How It Works
- Enter your product acquisition cost (COGS).
- Enter either your current selling price or target margin/markup percentage.
- Review gross profit per unit alongside percentage margins.
- Optionally add operating expenses to inspect net operating margins.
Frequently Asked Questions
Keystone pricing is a classic retail pricing rule of thumb where wholesale merchandise is marked up by exactly 100% (doubling the wholesale cost), which yields an exact 50% gross profit margin.
No. Because profit margin is
(Revenue - Cost) / Revenue, it can never mathematically exceed 100% (unless costs are negative). However, markup has no upper limit and can be 200%, 500%, or 1,000%+.
Gross margin only deducts direct product costs (COGS). Net margin accounts for all ongoing business overhead including rent, marketing ad spend, payment processing fees, and packaging.