Profit margin calculator.
Enter cost and revenue. See gross profit, margin %, markup %, and what price you'd need to hit a target margin instead.
Per item
Defaults work for most small shops in the EU.
Gross margin %
Gross margin is the first number every shop owner should know.
Margin tells you what share of each sale stays after the cost of the product. It's the starting point for every pricing decision. Too low and you're working for free. Too high and you may be leaving market share on the table.
The formula
Gross profit = revenue − costGross margin % = gross profit ÷ revenueSuggested price = cost ÷ (1 − target margin %)
Healthy ranges by category
Retail (general): 40-60%. Apparel/fashion: 50-70%. Books: 30-45%. Cafe/restaurant (gross of food only): 65-72% (= 100% − food cost %). Services: 60-90%.
Why this calculator also shows markup
Because they're not the same and people confuse them constantly. A 40% margin is a 67% markup. A 50% margin is a 100% markup. If your supplier quotes prices in "markup" and your accountant talks "margin," you'll mismatch unless you can convert between them on the fly.
What to do with this number
Compare it across products. Your top-margin items aren't your top-revenue items, and that's important. A €100 item at 60% margin earns €60. A €30 item at 70% margin earns €21. Stock more of the first kind, even if the price tag is scarier.