Profit Margin Calculator
Calculate profit margin, markup percentage, gross profit, and net profit instantly. Make smarter pricing decisions for your business.
Enter Your Details
Purchase cost + freight + other direct costs
Price at which you sell to customers
Rent, salaries, marketing per unit (for net profit)
Profit Analysis
Profit Margin = (Selling Price - Cost Price) / Selling Price × 100
Profit Margin Formulas
Gross Profit
Selling Price - Cost Price
Profit Margin
(Profit / Selling Price) × 100
Markup
(Profit / Cost Price) × 100
Selling Price
Cost / (1 - Margin%)
Industry Profit Margin Benchmarks
| Industry | Gross Margin | Net Margin | Typical Markup |
|---|---|---|---|
| Retail (General) | 25-50% | 2-10% | 30-100% |
| Grocery/FMCG | 15-25% | 1-5% | 15-35% |
| Manufacturing | 30-50% | 5-15% | 40-100% |
| Software/Services | 60-90% | 15-30% | 100-400% |
| Restaurants | 60-70% | 3-9% | 200-400% |
| E-commerce | 20-40% | 5-12% | 25-70% |
* Margins vary significantly based on business model, scale, and market conditions
How to Use This Calculator
Select Mode
Calculate margin or find selling price
Enter Cost
Your total cost per unit
Enter Price/Margin
Selling price or target margin
Add Expenses
Optional operating expenses
Get Results
Margin, markup & profit
Frequently Asked Questions
Profit margin is the percentage of selling price that is profit (Profit/Selling Price × 100). Markup is the percentage added to cost price to get selling price (Profit/Cost Price × 100).
For example, if cost is ₹100 and selling price is ₹150:
- Profit = ₹50
- Profit Margin = 50/150 × 100 = 33.33%
- Markup = 50/100 × 100 = 50%
Good profit margins vary significantly by industry:
- Retail: 2-10% net margin, 25-50% gross margin
- Manufacturing: 5-15% net margin, 30-50% gross margin
- Software/Services: 15-30% net margin, 60-90% gross margin
Compare with industry benchmarks and aim for consistent improvement over time.
Use the formula: Selling Price = Cost Price / (1 - Desired Margin%)
Example: If cost is ₹100 and you want 25% margin:
Selling Price = ₹100 / (1 - 0.25) = ₹100 / 0.75 = ₹133.33
Our calculator does this automatically in "Find Selling Price" mode.
Gross Profit = Selling Price - Cost Price (direct costs only)
Net Profit = Gross Profit - All Operating Expenses (rent, salaries, marketing, utilities, etc.)
Gross profit shows product-level profitability, while net profit shows overall business profitability after all expenses.
Key strategies to improve profit margins:
- Reduce costs: Negotiate better supplier terms, optimize inventory
- Increase prices: Add value, improve branding, target premium segments
- Focus on high-margin products: Analyze item-level profitability
- Reduce operating expenses: Automate processes, optimize staffing
- Increase volume: Achieve economies of scale
Track margins regularly using accounting software like TallyPrime.
Track Profit Margins Across All Products with TallyPrime
Get real-time profit analysis, item-wise margins, and comprehensive financial reports. Make data-driven pricing decisions for your business.