📐 Profit Margin Calculator
Margin questions cause more small business confusion than any other math. Gross margin, net margin, and markup are three different numbers that people use interchangeably, and mixing them up leads to prices that quietly lose money. Enter your numbers once and see all three, labeled correctly.
Only costs that rise and fall with sales.
The costs you pay whether or not you sell.
Net profit margin
30%
Gross profit margin
60%
Markup over direct costs
150%
Net profit in dollars
$3,000
From $10,000 of revenue you keep $3,000: a 30 percent net margin on a 60 percent gross margin. Healthy small businesses usually run 50 percent or better gross and 10 to 20 percent net. You are in the healthy zone; protect it as you grow.
Estimates for planning, not financial advice. Your real numbers will vary; that is exactly why you track them.
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Thin margin? Check what the market actually charges
Most margin problems are pricing problems in disguise. Run a free competitor scan and see what businesses like yours charge before you decide your price is maxed out.
Scan your competitors free →Good questions about this math
What is the difference between gross margin and net margin?
Gross margin is what is left after the direct cost of delivering what you sold, as a percent of revenue. Net margin is what is left after ALL costs, including rent, software, payroll, and marketing. Gross tells you if the product works; net tells you if the business works.
What is the difference between margin and markup?
Margin is profit as a share of the PRICE. Markup is profit as a share of the COST. Selling a $40 cost at $100 is a 60 percent margin but a 150 percent markup. Retailers talk markup, accountants talk margin, and confusing the two is how people accidentally price at half the margin they intended.
What is a good profit margin?
It varies by model: restaurants often net 3 to 9 percent, retail 2 to 10, services 10 to 20, and software or digital products 20 percent and up. Compare yourself to your own industry, and watch the trend month over month more than the single number.