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Profit Margin & Markup Calculator
Pricing Points
$
$
Yields
Gross Profit
$25.00
Gross Profit Margin
38.5%
Pricing Markup Percentage
62.5%
Profit Margin vs. Pricing Markup: What’s the Difference?
Confusing profit margins with pricing markups is a common mistake that can lead to underpriced products and reduced profitability. While both numbers calculate profit, they use different baselines.
What is Gross Profit Margin?
Margin represents your net profit expressed as a percentage of the final selling price. It shows what proportion of each dollar earned you keep as profit.
Formula: Margin = (Selling Price - Cost) / Selling Price
What is Pricing Markup?
Markup represents the percentage increase added to your cost price to determine your selling price.
Formula: Markup = (Selling Price - Cost) / Cost
For example, if you buy an item for $40 and sell it for $65, your profit is $25. This results in a 38.5% profit margin, but a 62.5% markup.