Margin Calculator

What is a Margin Calculator?

A Margin Calculator is an essential pricing tool for retail businesses, e-commerce sellers, and wholesalers. It quickly determines your Gross Profit, Gross Margin percentage, and Markup percentage based on your item cost and final selling price.

Margin vs. Markup: The Crucial Difference

The biggest pricing mistake new business owners make is confusing Margin with Markup. They sound similar, but mathematically, they use different denominators.

The Gross Margin Formula

Margin is the percentage of your Selling Price that is profit. It tells you how much out of every dollar in sales you actually keep.

The Markup Formula

Markup is the percentage of your Cost that you added to create the selling price.

An Example to Make it Clear

• You buy a shirt for $50 (Cost).
• You sell it for $100 (Revenue).
• Your Profit is $50.
• Your Markup is 100% (Because you doubled the $50 cost).
• Your Margin is 50% (Because half of the $100 selling price is profit).