Running a business requires a clear understanding of your numbers. Our free Profit Margin Calculator helps entrepreneurs and freelancers calculate the gap between their costs and sales prices instantly. Whether you are selling on Amazon, running a local shop in Nepal, or offering freelance services globally, knowing your profit margin vs. your markup is essential for sustainable growth. Simply enter your costs and revenue to see your business health in real-time.
Margin vs. Markup: What's the Difference?
Profit Margin
This is the percentage of the selling price that is profit. If you sell for $100 and profit is $20, your margin is 20%.
Markup
This is the percentage added to the cost price. If your cost is $80 and you add $20 to the price, your markup is 25%.
Why it matters: Many new business owners confuse these two and end up underpricing their products.
Frequently Asked Questions
What is a good profit margin for a small business?
It varies by industry, but a 10% net profit margin is considered average, while 20% is considered high/good.
How do I calculate a 20% margin?
To get a 20% margin, you must divide your cost by 0.8. If your cost is $80, you must sell for $100.
Can I use this for my e-commerce store?
Yes! Use it to set prices for Shopify, Etsy, or local retail to ensure you are covering all your expenses.