Profit Margin Calculator
Enter your cost and selling price to see your profit margin instantly. Switch to Net mode to also subtract operating costs (packaging, delivery, platform fees) before the margin is calculated.
On a ₹100 sale costing ₹60, you make ₹40 profit — a 40% margin.
Reverse solve: what price do I need to charge?
Enter your cost and a target margin — this works out the selling price required to hit it.
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How to calculate profit margin
Profit margin tells you what percentage of your selling price is actual
profit, after subtracting cost. The formula is
margin % = (selling price − cost price) / selling price × 100.
This calculator has two modes: Gross margin uses only the
direct cost of the product itself, while Net margin
additionally subtracts per-sale operating costs — packaging, delivery,
payment gateway fees, platform commission — before working out the
percentage, giving you a more realistic view of what you actually keep.
Worked examples
Gross margin example: you sell a product for ₹100 that costs you ₹60 to make or buy. Profit = ₹100 − ₹60 = ₹40. Margin = ₹40 ÷ ₹100 × 100 = 40%. Every ₹100 in sales puts ₹40 in your pocket before any other costs.
Net margin example: same ₹100 sale and ₹60 cost, but now add ₹10 in packaging and delivery per order. Net profit = ₹100 − ₹60 − ₹10 = ₹30. Net margin = ₹30 ÷ ₹100 × 100 = 30% — a full 10 points lower than the gross figure, which is why gross margin alone can be misleading for businesses with meaningful per-order costs.
Working backwards: what price should I charge?
The reverse solver below flips the formula around: given your cost and a
target margin, it finds the price you need to charge using
required price = cost / (1 − target margin / 100). For example,
if your cost is ₹60 and you want a 40% margin, you need to charge
60 / (1 − 0.40) = ₹100 — exactly matching the first example
above, confirming the formula works both directions. Note that a margin
can never reach or exceed 100% (that would require an infinite or negative
cost), so the reverse solver only accepts targets up to 99.99%.
Margin vs markup — don't confuse the two
Profit margin is calculated as a percentage of the selling price; markup (a related but different number) is calculated as a percentage of the cost. A 50% markup on a ₹60 cost gives a ₹90 price, which is only a 33.3% margin — not 50%. If you're pricing products by adding a markup percentage instead of targeting a margin directly, use the Markup Calculator, which includes a margin↔markup conversion table.
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Frequently Asked Questions
Margin % = (selling price − cost price) / selling price × 100. For example, a ₹100 sale with a ₹60 cost has a profit of ₹40 and a margin of 40%.
Gross margin only subtracts the direct product cost. Net margin also subtracts per-sale operating costs like packaging, delivery, and platform fees, giving a more realistic picture of what you actually keep.
Use required price = cost / (1 − target margin / 100). For a ₹60 cost and a 40% target margin, the required price is 60 / 0.60 = ₹100.
No. Margin is calculated as a percentage of the selling price; markup is calculated as a percentage of the cost. The same numbers give different percentages for each — see the Markup Calculator for the conversion.
It varies widely by industry — retail often runs 20-30% gross margin, services can run much higher, and low-margin/high-volume businesses like grocery can be under 10%. Compare against your specific industry rather than a single benchmark.
