Price Margin Calculator - Calculate Profit, Margin, and Markup Easily

The Price Margin Calculator helps you determine how much profit you're making on a product based on its cost and selling price. This tool is essential for business owners, retailers, wholesalers, and anyone involved in pricing decisions. It quickly shows you your Profit, Profit Margin (%), and Markup (%).

What is Price Margin?

Price Margin, also called Profit Margin, is the percentage of the selling price that is profit. It shows how much profit you make from selling a product after covering the cost.

Formula:

$\text{Profit Margin (\%)}=\left(\frac{\text{Selling Price}-\text{Cost Price}}{\text{Selling Price}}\right)\times 100$

Formulas Used in the Calculator

1. Profit

Profit is the amount of money you earn after subtracting the cost of a product or service from the selling price. It represents your financial gain from a sale.

Formula:

$\text{Profit}=\text{Selling Price}-\text{Cost Price}$

2. Profit Margin (%)

Profit Margin (%) is the percentage of revenue that remains as profit after deducting the cost of goods sold. It shows how efficiently a company converts sales into actual profit.

Formula:

$\text{Profit Margin (\%)}=\left(\frac{\text{Profit}}{\text{Selling Price}}\right)\times 100$

3. Markup (%)

Markup (%) is the percentage added to the cost price of a product to determine its selling price. It reflects how much profit is made over the cost.

Formula:

$\text{Markup ( \%)}=\left(\frac{\text{Profit}}{\text{Cost Price}}\right)\times 100$

Example Calculation

Input:

• Cost Price = $50
• Selling Price = $80

Step 1: Calculate Profit

$\text{Profit}=80-50=30$

Step 2: Calculate Profit Margin

$\text{Profit Margin (\%)}=\left(\frac{30}{80}\right)\times 100=37.5\%$

Step 3: Calculate Markup

$\text{Markup (\%)}=\left(\frac{30}{50}\right)\times 100=60\%$

FAQs

1. How is Price Margin different from Markup?

Margin is based on the selling price, while markup is based on the cost price. Both show profitability but are calculated differently.

2. Why is calculating Price Margin important?

Knowing your price margin helps you set competitive prices, maximize profit, and make better financial decisions for your business.

3. What is a good profit margin?

A “good” profit margin varies by industry, but generally, 10% is considered average, 20% is good, and 5% or below may be too low.