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Margin Calculator

Calculate gross profit margin, markup percentage, cost of goods sold, and selling revenue to optimize business pricing strategies.

$
$
Gross Margin: 38.46% Markup: 62.50%
Gross Profit
$25.00
Profit per unit sold
Selling Price (Revenue)
$65.00
COGS: $40.00
Revenue Split 61.5% Cost • 38.5% Gross Profit

Profitability Breakdown

Cost of Goods Sold (COGS) $40.00
Selling Price $65.00
Gross Profit $25.00
Gross Margin 38.46%
Markup 62.50%

Margin vs. Markup: The Crucial Distinction

While both margin and markup measure profitability, they use different denominators:

Gross Margin (%)

Measures the percentage of total sales revenue retained after subtracting cost of goods sold (COGS).

Margin = (Profit ÷ Revenue) × 100%
Markup (%)

Measures the percentage added on top of the original cost to establish the retail selling price.

Markup = (Profit ÷ Cost) × 100%

Common Margin to Markup Conversions

  • 20% Margin ↔ 25% Markup
  • 33.3% Margin ↔ 50% Markup
  • 50% Margin ↔ 100% Markup
  • 60% Margin ↔ 150% Markup

Understanding your calculation

Method, example and limitations

How the calculation works

Profit margin divides profit by selling price, whereas markup divides profit by cost. These percentages answer different questions even for the same transaction.

Example to check

An item costing 60 and selling for 100 has profit 40, a margin of 40%, and a markup of about 66.67%.

Before using the result

Include the relevant costs when defining profit. A zero selling price has no defined margin, and gross margin may exclude overhead and tax.

Calculation methodology · Report a result that needs review