Margin Calculator

Gross margin tells you what percentage of your selling price is actual profit after covering the cost of the item — a core number for pricing decisions in any product-based business.

Margin vs. markup — the distinction that trips people up

Margin is profit as a percentage of the selling price. Markup is profit as a percentage of the cost. The same $20 profit on a $40 cost item is a 50% markup but only a 33% margin, because the percentages are calculated against different base numbers.

Frequently asked questions

What's a healthy gross margin?

It varies enormously by industry — compare against your specific industry benchmark, not a universal number.

Should I price based on margin or markup?

Either works as long as you're consistent about which one you're using.