Profit Margin Calculator

Frequently Asked Questions

What is gross profit margin?

Gross profit margin is (Revenue − Cost of Goods Sold) ÷ Revenue × 100. It shows what percentage of revenue remains after paying for the direct cost to produce or acquire the product, before operating expenses like rent, salaries, and marketing.

What is the difference between margin and markup?

Margin is calculated as a percentage of the selling price. Markup is calculated as a percentage of the cost. A 40% markup on a $10 item gives a $14 selling price and a 28.6% margin. They're often confused but produce very different results.

What is a good profit margin?

It depends heavily on industry. Retail typically targets 20–50% gross margin, SaaS businesses often see 70–80%, restaurants 3–9%, and manufacturing 25–35%. Compare against your industry benchmark rather than a universal standard.

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