A margin calculator determines gross profit margin, net profit margin, and markup for a product or business. Margin is the percentage of revenue retained as profit; markup is the percentage added to cost to reach the selling price.
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Pro Tip
Target margin, not target markup. If you want a 40% margin, the markup is 66.7%, not 40%. Always work from the selling price down: Margin = 1 − (Cost/Price).
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Did You Know?
Software companies have some of the highest gross margins in business (70–90%) because the marginal cost of delivering an extra copy of software is nearly zero. This is why software valuations are often 10–20× revenue.
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