UlvixorProfit Margin Calculator
Calculate the gross profit margin and markup of a product or service from its selling price and cost. These two figures are often confused, but they're calculated on different bases, and this tool helps you tell them apart clearly.
How it works
- Enter the selling price (revenue) of your product or service.
- Enter the cost associated with that product or service.
- The calculator automatically shows the gross profit in dollars.
- You'll also see the profit margin (% of selling price) and the markup (% of cost).
Use cases
- Setting selling prices that hit a target profit margin.
- Comparing the real profitability of different products in a catalog.
- Checking whether the markup applied to cost produces the expected margin.
- Explaining the difference between margin and markup to a sales team when setting prices.
Use cases
- Setting selling prices that hit a target profit margin.
- Comparing the real profitability of different products in a catalog.
- Checking whether the markup applied to cost produces the expected margin.
- Explaining the difference between margin and markup to a sales team when setting prices.
Common mistakes
- Confusing margin and markup, using the markup (calculated on cost) as if it were the margin (calculated on selling price).With a selling price of 100 and a cost of 50, the margin is 50% but the markup is 100%. The calculator shows both values separately so they don't get mixed up.
- Setting a selling price by applying a markup percentage to the cost, expecting that same percentage to be the final margin obtained.A 50% markup doesn't give a 50% margin — it gives 33.3%. Check the margin the calculator shows before setting the price, not just the markup applied.
- Forgetting to add taxes, fees, or other expenses to the cost before calculating the margin.The calculator only compares the selling price against the cost you enter. If you want to include taxes or other expenses, add them to the cost before entering it.
Frequently asked questions
Margin is calculated on the selling price: (revenue − cost) / revenue × 100. Markup is calculated on the cost: (revenue − cost) / cost × 100. They're different formulas, and unless the profit is zero, they always produce different percentages.
Not necessarily. For example, if you sell at 100 with a cost of 50, the margin is 50% (50/100) but the markup is 100% (50/50). Confusing the two is a common pricing mistake.
In that case markup is mathematically undefined (division by zero), so the calculator shows a dash in that field instead of an invalid number. Margin can still be calculated normally.
No. The calculation only compares the selling price against the cost you enter. If you want to include taxes, fees, or other expenses, add them to the cost before entering it.
Alternatives
In a spreadsheet you can build both formulas, (revenue − cost) / revenue and (revenue − cost) / cost, in separate columns to avoid mixing them up. This calculator shows both together instantly, along with the dollar profit, with no template to build.