Billing Bazaar Profit margin calculator
Find your profit, margin and markup from the cost and selling price – or enter the margin you want and get the price to sell at.
| Selling price | |
| Cost price | |
| Profit | |
| Margin (on selling price) | |
| Markup (on cost) |
Margin = profit ÷ selling price. Markup = profit ÷ cost. The same profit is always a smaller % as margin than as markup.
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How to use the Profit margin calculator
- Choose whether you know the selling price or the margin you want.
- Enter the cost price of the item.
- Enter the selling price, or the margin % you want to earn.
- Read the profit, margin % and markup %.
Margin vs markup
Margin is profit as a share of the selling price; markup is profit as a share of the cost. An item bought for ₹800 and sold for ₹1,000 makes ₹200 profit: that is a 20% margin but a 25% markup. Many shopkeepers add 20% to cost thinking they earn a 20% margin – they actually earn about 16.7%.
Price for a target margin
To earn a margin of M%, divide the cost by (1 − M/100). For a 25% margin on a ₹800 cost: 800 ÷ 0.75 = ₹1,066.67. Adding 25% to cost would give only ₹1,000 – a 20% margin.
Questions people ask
What is a good profit margin for a retail shop?
It depends on the trade. Grocery and FMCG often run on single-digit or low double-digit margins, while garments, footwear and gifts usually need much higher margins to cover rent, staff and unsold stock. Compare with others in your trade and check that your margin covers your monthly expenses.
Should I include GST in the cost and price?
If you are registered and claim input tax credit, use prices without GST. GST you collect is paid to the government, so it is not part of your profit.
How do I calculate margin percentage?
Margin % = (selling price − cost) ÷ selling price × 100. For cost ₹800 and price ₹1,000 it is 200 ÷ 1,000 × 100 = 20%.
Can margin be more than 100%?
No. Margin can approach but never reach 100%, because profit is always less than the selling price. Markup, on the other hand, can be 100% or more.