GenzeeProfit Margin Calculator
Enter cost and selling price to get profit, margin and markup — or set a target margin and let the tool price the product for you.
Profit per unit
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Margin vs markup — the confusion that costs money
Two percentages describe the same profit, and mixing them up is one of the most common small-business pricing errors. Markup is profit as a percentage of cost: buy at 700, sell at 1,000, and your markup is 300 ÷ 700 ≈ 42.9%. Margin is profit as a percentage of the selling price: the same sale has a margin of 300 ÷ 1,000 = 30%. A shopkeeper who wants a "40% margin" but applies a 40% markup ends up with only a 28.6% margin — a gap that silently eats profits across an entire inventory.
How to use this calculator
The Analyse section takes your cost and selling price and reports profit, margin and markup together, so you always see both numbers for the same price. The Target section works forwards: enter your cost and the margin you want, and it computes the price you must charge. Both update as you type.
The formulas
markup % = (price − cost) ÷ cost × 100
price for target margin = cost ÷ (1 − margin ÷ 100)
Note the division in the pricing formula: for a 40% margin on a 600-rupee cost, the price is 600 ÷ 0.60 = 1,000 — not 600 × 1.40 = 840, which would give only a 28.6% margin.
Worked example
A boutique buys kurtas at PKR 700 and sells them at PKR 1,000: profit PKR 300, margin 30%, markup 42.9%. The owner wants sneakers costing PKR 600 to earn a 40% margin: required price = 600 ÷ 0.6 = PKR 1,000. If she planned a 20%-off sale on those sneakers, the sale price of 800 still leaves a 25% margin — checking that before the promotion is exactly what this tool is for (pair it with the discount calculator).
When is this useful?
Setting retail prices, checking whether a wholesale offer leaves room to profit, planning sale discounts that don't dip below cost, comparing product lines by margin rather than raw profit, and preparing figures for a business plan. Margin also determines how much a business keeps from each rupee of revenue to cover rent, salaries and — eventually — taxes. Our guide to profit margins for small businesses goes deeper into healthy margin ranges by industry.
Frequently asked questions
What's a good profit margin?
It varies hugely by industry: groceries run on 2–5% net margins with high volume, clothing retail 40–60% gross, services often higher. Compare against your own sector, not a universal number.
Why is margin always smaller than markup?
Because the same profit is divided by a bigger number (price instead of cost). A 100% markup equals a 50% margin; a 50% markup equals a 33% margin.
Is this gross or net margin?
Gross — it considers only the product's direct cost. Net margin also subtracts overheads (rent, wages, utilities, tax) from the profit, and is always lower.
How do I price to survive a discount?
Decide the deepest discount you'll offer, then set the target margin high enough that the discounted price still clears your minimum. Test scenarios in the target section together with the discount calculator.
Should tax be included in the cost?
Include every non-refundable cost of getting the item ready to sell: purchase price, shipping, non-adjustable duties and taxes. If you're GST-registered and reclaim input tax, use the ex-tax cost.