Business & Freelance
Profit Margin Calculator - Gross & Net | FinanceMetricX
Calculate profit margins from cost and selling price. View gross margin, net margin after expenses, and markup percentage.
The price you pay to produce or purchase the item
The price at which you sell the item
Additional costs like shipping, packaging, marketing
How It Works
Gross Margin vs Net Margin
Gross margin measures profitability before operating expenses — it's simply (selling price - cost price) / selling price. Net margin accounts for all costs including overheads, shipping, and marketing. A healthy business tracks both.
Margin vs Markup
These are often confused. Margin is profit as a percentage of selling price. Markup is profit as a percentage of cost price. A product with 50% markup has a 33.3% margin. When pricing, know which metric you're using.
Typical Margins by Industry
- Retail/E-commerce: 20–50% gross margin
- Software/SaaS: 70–90% gross margin
- Services: 50–70% gross margin
- Manufacturing: 25–40% gross margin
Frequently Asked Questions
Margin is profit as a percentage of selling price. Markup is profit as a percentage of cost price. A 50% markup on a ₹100 item means selling at ₹150. The margin on that same sale is 33.3% (₹50 profit / ₹150 selling price).
It varies by industry. Retail typically sees 20-50% gross margins. Service businesses can achieve 50-70%. Software/SaaS businesses often see 70-90%. Net margins are lower after operating expenses — 10-20% net margin is considered healthy for most businesses.
You can either increase revenue (raise prices, upsell) or reduce costs (negotiate with suppliers, reduce waste, automate). Often a combination works best. Track both gross and net margins monthly to spot trends early.