Calculate net margin, markup, ROI, break-even, and price sensitivity — with platform benchmarks and scenario analysis.
How to Use This Calculator
1
Enter Cost and Revenue
Input the cost of the product or service and the selling price, or enter one value with the desired margin to solve for the other.
2
Choose Solve Mode
Calculate margin from cost and price, find the selling price for a target margin, or determine maximum cost for a target margin.
3
Analyze Profitability
See gross margin percentage, profit per unit, and a visual breakdown of cost versus profit.
Key Terms
- Gross Margin
- Revenue minus cost of goods sold, divided by revenue, expressed as a percentage.
- Net Margin
- Profit after all expenses (operating, interest, taxes) divided by revenue.
- COGS
- Cost of Goods Sold — direct costs to produce or acquire the product (materials, labor, shipping).
- Operating Margin
- Revenue minus all operating expenses, divided by revenue — includes overhead but excludes interest and taxes.
- Contribution Margin
- Revenue minus variable costs only, showing how much each sale contributes to covering fixed costs.
Real-World Examples
Example 1
Retail Product
Cost: $28, Selling Price: $65
Margin: 56.9%. Profit: $37 per unit. To hit 60% margin, price needs to be $70.
Example 2
SaaS Subscription
Cost (hosting + support): $12/mo, Price: $49/mo
Margin: 75.5%. Profit: $37/mo. At 1,000 subscribers: $37,000/mo gross profit.
Typical Gross Margins by Industry
| Industry | Low | Median | High |
|---|
| SaaS / Software | 65% | 75% | 90% |
| Retail (Clothing) | 30% | 50% | 65% |
| Restaurants | 25% | 35% | 45% |
| Manufacturing | 15% | 30% | 45% |
| Grocery | 20% | 28% | 35% |
Profit Margins Explained
Margin vs Markup
Margin and markup measure the same profit differently. A product costing $60 sold for $100 has a 40% margin but a 66.7% markup. Margin is always lower than markup for the same transaction. Margin is based on revenue (profit/price), markup is based on cost (profit/cost). Using the wrong metric when setting prices is a common and costly error — a 50% markup is only a 33% margin.
Healthy Margins by Business Type
SaaS companies target 70-85% gross margins because software has near-zero marginal cost. Retail clothing targets 50-65% to cover markdowns and returns. Restaurants operate on razor-thin 5-10% net margins despite 60-70% food margins because labor, rent, and waste consume the difference. Know your industry benchmarks and compare at the same margin level (gross, operating, or net).