Finance
Profit Margin Calculator
Gross profit margin, net margin, and markup for any product or business.
In this article
Gross margin vs markup — they're not the same
Gross margin = profit ÷ revenue. Markup = profit ÷ cost. A 40% markup results in a 28.6% margin — not 40%. Confusing the two is one of the most common pricing mistakes.
Margin benchmarks by industry
- Software/SaaS: 70–90%
- Retail: 20–50%
- Restaurants: 3–9%
- Manufacturing: 10–30%
How to improve your margin
Either raise prices or reduce COGS. Raising prices by 5% on a 30% margin product increases profit by 16.7% — with no volume change required.
Frequently asked questions
What is a good profit margin?▾
It depends on industry. SaaS aims for 70%+, retail for 30–50%, restaurants for 5–10%. Compare against your specific industry benchmark.
What is the difference between margin and markup?▾
Margin = profit ÷ revenue. Markup = profit ÷ cost. A product that costs $60 and sells for $100 has a 40% margin and a 66.7% markup.
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