Profit Margin Calculator
Enter cost and sale price; the profit amount, the profit margin (%) and, on cost, the markupcalculate instantly.
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For net profit, also account for deductions such as marketplace commission, shipping and VAT.
What Is Profit Margin?
Profit Margin is the ratio of the profit you make to the sale price, expressed as a percentage. It is one of the most fundamental financial indicators of how much your business earns on every sale. The higher the margin, the more profitable the sale.
How Is Profit Margin Calculated?
The formula is simple:
Profit Margin (%) = (Sale Price − Cost) / Sale Price × 100
For example, if you sell a product costing ₺80 for ₺200:
- Profit = 200 − 80 = 120 TL
- Profit margin = 120 / 200 × 100 = %60
The Difference Between Margin and Markup
Two frequently confused concepts:
- Profit margin: Profit as a ratio to the sale price → 120 / 200 = 60%
- Markup: Profit as a ratio to cost → 120 / 80 = 150%
For the same product the margin is 60% and the markup is 150%. Be clear about which one you're using when you price.
Don't Forget Net Profit
The figure above is the gross margin. If you sell on a marketplace, commission, shipping and service fees reduce your net profit — you can see this the commission calculator. You can factor VAT into the price with the VAT calculator and discounts with the discount calculator.
Frequently Asked Questions
How Is Profit Margin Calculated?
Profit margin (%) = (Sale − Cost) / Sale × 100. Sell a product costing 80 TL for 200 TL and the profit is 120 TL at a 60% margin.
What's the difference between margin and markup?
Margin is profit relative to the sale price; markup is profit relative to cost. At 80/200 the margin is 60% and the markup 150%.
What counts as a good profit margin?
It varies by sector; 20–50% is common in retail. What matters is that the net margin stays positive after commission and shipping.
How do I set the sale price from a target margin?
Sale = Cost / (1 − Margin/100). For a cost of 80 TL and a 60% target margin, the sale price should be 200 TL.
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