Profit Calculator

Worth Knowing

Profit is the easy part; the trap is margin versus markup. Both describe the same dollar of profit, but they divide it by different things — margin uses the selling price, markup uses the cost. Buy at $40 and sell at $60 and you have made $20, which is a 33.3% margin but a 50% markup. Quoting one when you meant the other is one of the most common pricing errors in small business, and it always errs in the same direction: applying a "40% markup" when you needed a 40% margin leaves you about 12 points short on every sale. To convert, margin = markup ÷ (1 + markup); to price for a target margin, divide cost by (1 − margin) rather than multiplying by (1 + margin). This calculator reports gross profit — revenue minus the direct cost of the thing you sold. It is not net profit, and the gap between them is where most businesses actually live. Gross profit still has to cover rent, software, payroll, payment-processing fees (typically 2.9% + $0.30 per card transaction in the US), returns, shipping, and marketing before anything reaches you, and then self-employment and income tax come out of what is left. A healthy gross margin varies enormously by sector: grocery retail runs on single digits and survives on volume, while software routinely clears 80% because the marginal cost of one more copy is close to zero. Compare your margin against your own industry rather than against a general benchmark, and track it per product — a blended average hides the lines that are quietly losing money.

How to Use

1. Enter the cost price of the product.
2. Enter the selling price.
3. View the profit amount and profit margin percentage.

Formula

Example

Cost $40, Sold for $60 → Profit = $20, Margin = 33.3%.

Frequently Asked Questions