Calculate Profit, Margin, Markup and Selling Price Instantly
| Profit Margin | Markup | |
|---|---|---|
| Formula | Profit ÷ Selling Price × 100 | Profit ÷ Cost Price × 100 |
| Meaning | Percentage of Selling Price that is Profit | Percentage Added Over Cost Price |
| Your Values | — | — |
| Example | Cost ₹800 · SP ₹1,000 · Profit ₹200 → Margin 20% | Cost ₹800 · SP ₹1,000 · Profit ₹200 → Markup 25% |
Many business owners confuse Profit Margin with Markup. Margin is calculated on the Selling Price. Markup is calculated on the Cost Price. They are not the same.
If your markup is 25%, your profit margin is NOT 25%. Understanding the difference helps you price products correctly.
See the impact of changing your selling price or target margin.
Profit Margin shows how much profit you keep from every rupee of sales. Formula: (Profit ÷ Selling Price) × 100. A 25% margin means you keep ₹25 as profit for every ₹100 of sales.
Markup is the percentage added to cost to arrive at selling price. Formula: (Profit ÷ Cost Price) × 100. Markup and Margin are different — a 33.3% markup equals a 25% margin.
Many MSMEs confuse the two. Markup is based on cost; Margin is based on selling price. Always decide your target as Margin %, then convert to Markup when setting prices.
It depends on the industry. Retail often targets 20–40%, manufacturing 10–25%, and trading 8–20%. Focus on sustainable margins after all costs.
No. Markup is profit divided by cost. Margin is profit divided by selling price. A 50% markup equals a 33.3% margin.
Selling Price = Cost Price ÷ (1 − Desired Margin/100). Example: Cost ₹800, desired margin 25% → Selling Price = 800 ÷ 0.75 = ₹1,066.67.
For margin analysis on your own goods, use cost exclusive of recoverable GST (ITC). For final customer pricing, work with GST-inclusive figures where relevant.
Return on Cost is the same as Markup % — profit expressed as a percentage of cost price. It shows how much you earn on every rupee invested in the product.
Profit margin cannot exceed 100% (that would mean selling price is infinite relative to cost). Markup can exceed 100% easily.
At least every quarter, or whenever major cost inputs (raw material, freight, power) change significantly.
Ignoring fixed and indirect costs, copying competitor prices blindly, and confusing markup with margin.
Not always. Very high margins with very low volume can earn less than moderate margins with high turnover. Look at absolute profit and cash flow too.
Discounts reduce selling price and therefore reduce margin. Always check the post-discount margin before running promotions.
The selling price at which profit is zero (equal to cost, ignoring other expenses). Any price above it contributes to profit.
Yes, but also factor in freight, insurance, duties, currency fluctuation and payment terms when setting export prices.
Yes. Treat your fully-loaded cost per job/hour as Cost Price and your quote as Selling Price.
Because they use different denominators. This is normal and correct. Use margin for profitability analysis and markup for cost-plus pricing.
Yes. It is part of the BusinessZindagi Tools plugin and is free for educational and business planning use.
Disclaimer: This calculator provides estimated values for educational and planning purposes. Actual business profitability depends on all direct and indirect costs, taxes, discounts, and market conditions.