WebSoftOSBusiness profit margin calculator
Gross margin = (selling price − cost) ÷ selling price. Markup = (selling price − cost) ÷ cost. Net margin also subtracts operating expenses. To hit a target margin, price = cost ÷ (1 − target margin).
Result
| Gross profit | ₹30,000 |
|---|---|
| Gross margin | 30.0% |
| Markup on cost | 42.9% |
| Net profit (after operating expenses) | ₹15,000 |
| Net margin | 15.0% |
| Price needed for 35% gross margin | ₹1,07,692 |
Margin is profit as a share of selling price; markup is profit as a share of cost. A 25% markup is only a 20% margin.
Margin vs markup
A product bought at ₹80 and sold at ₹100 has a 25% markup but a 20% margin. Confusing the two is the most common pricing mistake in distribution businesses.
Frequently asked questions
What is a good profit margin?
It depends on the industry — distribution often runs at 5–15% gross margin, services and software far higher. Compare against your own history and peers.
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