Gross Margin
Revenue minus cost of goods sold (COGS) divided by revenue. Shows product-level profitability before overhead.
Calculate your profit margin by entering revenue and cost. See gross profit, margin percentage, and equivalent markup. Essential for business owners, freelancers, and entrepreneurs to ensure profitability.
Profit margin is the percentage of revenue that becomes profit after costs are deducted. It tells you how many cents of profit you make for every dollar of sales.
A 35% margin means you keep $0.35 of every $1 in revenue as profit. The remaining $0.65 goes to costs. Higher margins mean more efficient, profitable operations.
Gross margin considers only direct costs (COGS). Net margin also includes overhead, taxes, and all expenses. Both are critical for evaluating business health.
Revenue minus cost of goods sold (COGS) divided by revenue. Shows product-level profitability before overhead.
Gross profit minus operating expenses divided by revenue. Measures core business efficiency including rent, salaries, etc.
Final bottom-line profit after ALL expenses including taxes, interest, and one-time charges. The ultimate profitability metric.
Razor-thin net margins. Walmart operates at ~2.5%. Volume is everything in retail.
High margins from low marginal costs. Best SaaS companies hit 30%+ net margins at scale.
Thin margins despite high markups. Labor, rent, waste, and overhead consume most revenue.
Service businesses have healthy margins. Main costs are labor and overhead, no inventory.
Mid-range margins accounting for shipping, returns, marketing, and platform fees.
Varies widely by specialty. Pharma can be 20%+, hospitals 3-8%, dental practices 15-25%.
Click to try.
$50 revenue, $30 cost.
$150/hr rate, $45/hr cost.
$25 revenue, $23 cost.
$99/mo subscription, $5 cost to serve.
It varies by industry. 5% is low but acceptable in high-volume retail. 10-20% is healthy for most businesses. 20%+ is excellent. Compare to your specific industry benchmarks.
Two ways: increase revenue (raise prices, upsell) or decrease costs (negotiate suppliers, improve efficiency, reduce waste). Most businesses benefit from a combination of both.
Margin is profit ÷ revenue. Markup is profit ÷ cost. Margin is always lower than markup for the same transaction. 50% margin = 100% markup.
Yes. Negative margin means you're losing money on every sale. This happens when costs exceed revenue — common for startups investing in growth or during price wars.
Net Margin = (Revenue - ALL expenses) ÷ Revenue × 100. Include COGS, operating expenses, taxes, interest, and everything else. Use our Net Profit Calculator for this.
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