Profit Margin Calculator
Calculate selling price from cost and margin, margin from cost and price, or maximum cost from price and target margin.
The cost of your product or service
The price you sell at
Your target profit margin percentage
Results
Calculated Selling Price:
$0.00
Calculated Margin:
0.00%
Maximum Cost:
$0.00
Profit Amount:
$0.00
Formula: Margin % = (Selling Price - Cost) / Selling Price × 100
Understanding Profit Margin
Profit margin is one of the most important metrics for any business. It tells you what percentage of your selling price is profit after all costs are covered.
Why Profit Margin Matters
- Pricing Strategy: Helps you set competitive yet profitable prices
- Business Health: Indicates whether your business model is sustainable
- Comparison: Allows you to compare profitability across products or services
- Decision Making: Guides decisions about discounts, volume pricing, and cost reduction
Common Profit Margins by Industry
- Retail: 20-50% depending on product category
- Restaurants: 3-5% net margin (60-70% gross on food)
- Software/SaaS: 70-90% for established products
- Consulting: 10-20% after all costs
- Manufacturing: 5-20% depending on scale
Tips for Improving Your Margins
- Reduce costs without sacrificing quality
- Focus on higher-margin products or services
- Add value to justify premium pricing
- Negotiate better rates with suppliers
- Improve operational efficiency