Profit Margin Calculator
Identify hidden leaks and discover your real business clarity.
Enter Costs
Cost Price (₹)
Include Hidden Costs
Define Revenue
₹
Hidden Leaks
GST Rate
Platform Commission5%
e.g. Swiggy / Amazon / FlipkartFinancial Summary
Net Profit
₹132
Margin %
18%
Healthy
Selling Price Breakdown (100%)
Cost Breakdown
Cost of Goods
₹500GST (12%)
₹80Commission (5%)
₹38Net Profit₹132
Master Your Profit Margins and Pricing Strategy
Understanding the subtle but critical difference between markup and profit margin is essential for setting the right prices for your products. A healthy profit margin ensures your business can cover operating expenses, invest in marketing, and remain sustainable in the long run.
Many entrepreneurs mistakenly use markup and margin interchangeably. However, calculating a 20% markup on your costs does not mean you have a 20% profit margin. Using this profit margin calculator helps retail, e-commerce, and service-based businesses dial in their pricing strategy to maximize net income without pricing themselves out of the market.
Business Tip
Regularly reviewing your profit margins on a per-product basis (SKU-level profitability) can help you identify when it's time to raise retail prices, negotiate with suppliers, or cut a poorly performing product line.
| Financial Metric | Formula | What it tells you |
|---|---|---|
| Gross Profit | Revenue - Cost of Goods Sold (COGS) | The absolute dollar/rupee amount you made on a single sale. |
| Profit Margin | (Gross Profit / Revenue) × 100 | The percentage of the final selling price you keep as profit. (Always < 100%) |
| Markup | (Gross Profit / Cost) × 100 | The percentage you added to your base cost to arrive at the selling price. |
How to Use the Calculator
Enter Cost Price
Input the total amount it cost you to purchase or manufacture the item. This should include raw materials, direct labor, and inbound shipping (COGS).
Enter Selling Price
Input the final retail price at which you intend to sell the item to the customer.
Analyze Results
The tool will instantly display your gross profit absolute amount, gross margin percentage, and markup percentage.