Margin Percentage Calculator

A Margin Percentage Calculator helps determine how much profit you earn on a product based on its cost price and selling price. Margin percentage is widely used in retail, wholesale, e-commerce, and finance to evaluate profitability and set selling prices.

Margin Formulas

3.1 Margin Amount

$\text{Margin Amount}=SP-CP$

3.2 Margin Percentage

$\text{Margin \%}=\frac{SP-CP}{SP}\times 100$

Worked Example

Let’s calculate margin percentage for the following:

• Cost Price (CP): $40
• Selling Price (SP): $60

Step 1 — Margin Amount

$\text{Margin Amount}=60-40=20$

Step 2 — Margin Percentage

$\text{Margin \%}=\frac{20}{60}\times 100=33.33\%$

Final Output for This Example

• Margin Amount: $20
• Margin Percentage: 33.33%

FAQs

1. What is margin percentage?

Margin percentage is the ratio of profit to the selling price, expressed as a percentage. It shows how much of each dollar of sales is profit after covering the cost of the product.

2. How do I calculate margin percentage?

Margin percentage is calculated using the formula:

$\text{Margin \%}=\frac{SP-CP}{SP}\times 100$

It compares profit (selling price minus cost price) against the selling price.

3. What is a good margin percentage?

A "good" margin depends on the industry:

• Retail: 30–50%
• Electronics: 5–20%
• Fashion/Jewelry: 50–80%

Higher margins are better, but pricing must remain competitive.

4. What is the difference between margin and markup?

Margin uses selling price as the base, while markup uses cost price.

• Margin % = Profit ÷ Selling Price
• Markup % = Profit ÷ Cost Price

Margin is typically lower than markup for the same transaction.

5. Can margin percentage be negative?

Yes. If the selling price is lower than the cost price, the margin becomes negative. This means the business is losing money on each sale.