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Profit Margin Calculator

Optimize your pricing and maximize your profits instantly.

Gross Profit

₹ 50.00

Margin

33.33%

Markup

50.00%

Profit Margin vs. Markup Calculator

Understanding the difference between Margin and Markup is crucial for setting profitable prices. This calculator helps retailers and wholesalers determine their true profitability instantly.

What is Profit Margin?

Profit Margin is the percentage of revenue that is profit. It tells you how much of every rupee earned is yours to keep.
Margin = ((Revenue - Cost) / Revenue) × 100

What is Markup?

Markup is the percentage added to the cost price to get the selling price. It's commonly used in retail pricing.
Markup = ((Revenue - Cost) / Cost) × 100

Example: If you buy a product for ₹100 and sell it for ₹150:
• Your Profit is ₹50.
• Your Margin is 33.33% (₹50 is 33% of ₹150)
• Your Markup is 50% (₹50 is 50% of ₹100)

Frequently Asked Questions

Margin is the percentage of the selling price that is profit: (Selling Price - Cost) / Selling Price × 100. Markup is the percentage of cost added as profit: (Selling Price - Cost) / Cost × 100. A 50% markup equals a 33.3% margin.
Profit Margin (%) = ((Revenue - Cost) / Revenue) × 100. For example, if you sell a product for ₹500 that costs ₹350, your profit margin = (150/500) × 100 = 30%.
It varies by industry. Retail typically has 2-5% net margins, software/tech 15-25%, and services 10-20%. Gross margins are higher — retail 25-50%, manufacturing 30-40%. Compare with your industry benchmarks for a meaningful assessment.
Gross margin considers only direct costs (COGS — materials, labor). Net margin accounts for ALL expenses including rent, salaries, taxes, and interest. Gross margin is always higher than net margin. Both are important for business health assessment.
Higher margins mean more profit per unit but may reduce sales volume. Lower margins increase volume but reduce per-unit profit. The optimal margin balances both. Consider competitor pricing, customer willingness to pay, and your cost structure when setting margins.