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Margin Calculator
Calculate profit margin, markup and selling price instantly.
Margin & Markup
See both metrics side by side from the same inputs
Instant Pricing
Calculate selling price from cost and desired margin
Industry Benchmarks
Compare your margins against typical industry ranges
Calculate Profit Margin
Enter cost and selling price, or cost and desired margin % to calculate the selling price.
How to Calculate Profit Margin
The Margin Formula
Margin = ((Selling - Cost) / Selling) x 100
Markup = ((Selling - Cost) / Cost) x 100
Margin expresses profit as a share of revenue (selling price). Markup expresses profit as a share of cost. Both measure profitability but from different perspectives — margin is the standard in financial reporting.
Worked Example
You buy a product for £60 and sell it for £100. Profit = £40. Margin = (40 / 100) x 100 = 40%. Markup = (40 / 60) x 100 = 66.7%. The same £40 profit gives very different percentages depending on whether you divide by selling price (margin) or cost (markup).
Margin vs Markup: The Key Difference
Margin (% of Revenue)
Cost £60, Selling Price £100, Profit £40. Margin = £40 / £100 = 40%. Margin tells you what share of each sale is profit. A 40% margin means 40p of every £1 in revenue is gross profit. This is the metric used in income statements and financial analysis.
Markup (% of Cost)
Cost £60, Selling Price £100, Profit £40. Markup = £40 / £60 = 66.7%. Markup tells you how much you added on top of cost. A 66.7% markup means you charge 66.7% more than you paid. Retailers commonly use markup for pricing, but investors prefer margin.
How to Use This Margin Calculator
Enter Cost Price
The amount you pay to acquire or produce the item.
Enter Selling Price
The price you charge customers, or your desired margin %.
View Results
See margin %, markup %, profit per unit and a side-by-side comparison.
Healthy Profit Margins by Industry
- Retail: 3-5% net. High volume, low margins. Grocery and fashion retailers operate on thin margins and rely on inventory turnover and scale to generate profit.
- SaaS: 70-80% gross. Software has near-zero marginal cost per user, resulting in very high gross margins. Net margins are lower (15-25%) after sales, marketing and R&D.
- Manufacturing: 10-20%. Margins depend on automation, raw material costs and pricing power. Specialty manufacturers with differentiated products tend toward the higher end.
- Professional Services: 15-30%. Consulting, legal and accounting firms have high labour costs but no physical inventory. Margins scale with utilisation rates and billing efficiency.
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