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Profit margin shows what percentage of your selling price is actual profit, after subtracting the cost of the item. It's the single most important number for pricing decisions — a high revenue number means nothing if your margin is too thin to sustain the business.
These two are easily confused. Margin is profit divided by the selling price. Markup is profit divided by the cost. A $30 profit on a $50 cost item selling for $80 is a 37.5% margin but a 60% markup — same dollars, different percentage base.
It varies heavily by industry. Retail often runs 20-50%, while software and services can exceed 80% since there's little marginal cost per sale. The right benchmark is your own industry's typical range, not a universal number.