Calculate gross profit margin and markup from cost price and selling price. Essential for shop owners, e-commerce sellers, freelancers and small businesses to price products correctly and check unit economics.
Landed cost - buy + shipping + GST
What the customer pays (excl. GST)
Profit per unit
₹400.00
Profit margin
40.00%
As % of selling price
Markup
66.67%
As % of cost
Cost vs. Profit (per unit)
Margin vs. Markup
Margin uses selling price as the base; markup uses cost. For the same item, markup is always larger. A 50% markup on ₹100 gives SP = ₹150, but the margin is only 33.3% (₹50 / ₹150).
Use landed cost (purchase + shipping + customs + non-creditable GST) and net SP (excluding output GST) for a true gross-margin view. Net margin further subtracts operating costs, salaries and taxes.
Profit margin is the single most important number in any product-led business. It determines whether you can scale, whether you can absorb a bad month, and whether your business model survives an increase in supplier prices or a competitor's price cut. Knowing your margin per SKU isn't optional for retail, e-commerce, manufacturing or restaurant businesses - it's the foundation of every pricing decision and every promotional strategy. This calculator computes both gross margin and markup percentages from cost and selling price, the two views that small business owners and finance teams use daily.
Margin vs markup is one of the most-confused distinctions in retail finance. They're related but different: margin is profit as a percentage of selling price (what fraction of revenue you keep); markup is profit as a percentage of cost (how much over cost you charge). A 50% markup yields a 33.3% margin. A 100% markup yields a 50% margin. Mixing them up - say, by aiming for '40% margin' but actually applying a 40% markup - quietly undercharges by several percentage points across thousands of products. The calculator makes both visible at once so the confusion is impossible.
Enter the cost price (what you pay to acquire or produce one unit).
Enter the selling price (what your customer pays).
Read the profit per unit, the profit-margin percentage, and the markup percentage.
Profit is selling price minus cost. Margin expresses that profit as a percentage of selling price (what fraction of revenue is profit). Markup expresses it as a percentage of cost (how much extra you charge over cost). Margin and markup are not the same number - a 50% markup is only a 33% margin.
Profit = SP − CP ; Margin% = Profit / SP × 100 ; Markup% = Profit / CP × 100
Profit per unit = Selling Price (SP) − Cost Price (CP). Margin% = Profit/SP × 100. Markup% = Profit/CP × 100. The two are linked: markup = margin / (1 − margin), and margin = markup / (1 + markup). Always confirm which one your supplier, competitor or industry benchmark is quoting - 'we make 50%' could mean either, and the difference is meaningful.
Cost price should always include landed cost, not just the supplier invoice. Add shipping, customs duty (for imports), warehousing, packaging, GST that's not input-credited, and any per-unit handling cost. For e-commerce, also add platform commission, payment-gateway fee, and reverse-logistics provision (typical 5-15% return rate for apparel, 1-3% for electronics). Without these, the headline margin will be 5-15 percentage points higher than the real margin.
Gross margin is the starting point for understanding unit economics, but net margin (after rent, salaries, marketing, tax) is what actually flows to the bottom line. A grocery store at 5% gross might have 1% net; a software business at 70% gross might have 25% net. Always compute both for any pricing or stocking decision.
T-shirt cost (FOB + import + packaging) = ₹300. Target margin 40%. Selling price = 300 / (1 − 0.40) = ₹500. Markup = 200/300 = 66.7%. After 5% return rate, effective realised margin ≈ 36%. After 18% GST on the gross margin (which is part of price), the post-tax retained margin is what actually matters.
Plate cost (ingredients + labour + utilities allocated) = ₹120. Industry markup target: 3.5× food cost. Menu price = 120 × 3.5 = ₹420. Margin = 300/420 = 71.4%. After kitchen-staff, server, rent and other overheads, net profit per plate typically lands at ₹40-60 - much smaller than the headline gross figure suggests.
Margin is profit as % of selling price. Markup is profit as % of cost. A ₹100 cost item sold at ₹150 has a 50% markup (50/100) but only 33.3% margin (50/150). Margin is always smaller than the corresponding markup.
It depends on the industry. Grocery retail runs on 2-5% margins. Apparel and accessories are 30-50%. Software/services can hit 60-80%. Compare to your industry benchmark.
Always use landed cost - purchase price plus shipping, customs, GST input credit and packaging. That gives the true profit per unit. Using only the supplier price overstates margin.
No. Gross margin uses just cost of goods. Net margin subtracts all operating expenses, salaries, rent, marketing and taxes. Gross is usually 2-3x net.
Selling Price = Cost / (1 − target margin). For a 40% margin on a ₹600 cost: SP = 600 / 0.6 = ₹1000. The calculator works in reverse if you set SP and check the resulting margin.
GST is a pass-through tax. Compute margin on net (excluding GST) cost and net selling price. Adding GST to SP without raising CP gives a misleadingly higher margin.
Indian financial products - home loans, fixed deposits, mutual funds, NPS, insurance - each carry their own quirks: monthly reducing balance vs flat-rate interest, quarterly vs monthly compounding, indexation on capital gains, the choice between the old and new tax regime. We design every finance calculator to use the formula that an Indian bank, AMC, or insurer would actually use, and to surface the assumptions in plain English so you can audit the result against your own statement.
Use this calculator alongside the EMI, SIP and inflation calculators to plan your money holistically. A standalone EMI number means little until you compare it with your in-hand salary, your existing debt-to-income ratio, and the impact of inflation on the real cost of the loan. The related-tool grid below makes it one click to chain these analyses together.
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