Profit Margin Calculator

Gross profit equals selling price minus cost price in dollars. Profit margin equals profit divided by selling price times one hundred, telling you the share of each revenue dollar kept as profit after direct costs. Markup equals profit divided by cost price times one hundred, telling you how much you added on top of cost to set price. For example buying at fifty dollars and selling at eighty dollars gives thirty dollars profit, a thirty-seven point five percent margin, and a sixty percent markup. All math runs locally in your browser with no uploads.

Margin versus markup confusion costs USA sellers thousands: A forty percent margin is not the same as a forty percent markup, because denominators differ. Forty percent markup on fifty dollars gives seventy dollars price and only twenty-eight point six percent margin. Forty percent margin on fifty dollars cost requires eighty-three dollars thirty-three cents price via cost divided by one minus margin. Distributors quoting markup while retailers target margin cause systematic underpricing across grocery, apparel, and electronics in Chicago, Dallas, and Atlanta every day.

USA benchmarks by industry for 2026: Grocery retail runs twenty-five to thirty-five percent markup with thin two to five percent net after labor and rent. Apparel boutiques target fifty to one hundred percent markup for fifty percent margin to cover returns. Restaurants aim sixty-five to seventy percent food margin on entrees, with coffee above seventy-five percent. SaaS startups pitch seventy-five to eighty-five percent gross margin to venture firms in Silicon Valley. Contractors add fifteen to twenty percent overhead plus ten percent profit on top of direct job costs in Phoenix and Houston.

How to price from a margin target: Start from landed cost including freight, packaging, and marketplace fees, not just wholesale. Divide cost by one minus desired margin decimal to get required price. Fifty dollars cost at forty percent margin needs eighty-three thirty-three. At thirty percent margin needs seventy-one forty-three. Reverse check any supplier deal by computing margin from their quote before accepting. Include credit-card two point nine percent plus thirty cents in effective cost for Shopify and Stripe sales in the USA.

Privacy, taxes, and limits: Everything stays local with no tracking, ideal for sensitive cost data before launches. USA sales tax applies after discount on the selling price and varies by state from zero in Oregon to nearly ten percent in Tennessee, so margin math here is pre-tax. This tool covers gross unit economics only and excludes overhead like rent, payroll, and ads. For break-even with fixed costs, pair with the break-even calculator using monthly overhead divided by per-unit profit.

Next steps after a healthy margin: Copy results into pricing sheets, test a five percent price lift on low-volume SKUs, and watch conversion in Google Analytics for two weeks. If margin falls below twenty percent on Amazon after FBA, raise price three dollars or bundle two units to spread pick fees. Document cost assumptions with dates because resin, cotton, and freight swing quarterly across USA suppliers from Los Angeles ports to New Jersey warehouses.