Analyze Your Profit Margins
Calculate profit margins, markup percentages, and breakeven points to understand your business profitability and make data-driven decisions.
Enter Your Numbers
Breakeven Analysis
What is the Profit Margin Calculator?
The Profit Margin Calculator helps you analyze the profitability of your products by calculating key metrics like profit margin percentage, markup, and breakeven points. Make informed decisions about pricing, costs, and business sustainability.
Profit Margin Analysis
Understand what percentage of your revenue is actual profit. Compare against industry standards and competitors.
Breakeven Calculation
Discover exactly how many units you need to sell to cover your fixed costs and start making profit.
Performance Rating
Get instant feedback on whether your margins are excellent, good, fair, or need improvement based on business standards.
Who Should Use This Tool?
Business Owners
Analyze product profitability to decide what to sell more of, what to discontinue, and where to focus marketing efforts.
Financial Planners
Evaluate business viability, create financial projections, and advise on pricing strategies for clients or your own ventures.
E-commerce Sellers
Determine if your products are profitable after all marketplace fees, shipping costs, and other expenses are factored in.
Startups & Entrepreneurs
Validate business models, understand when you'll become profitable, and make strategic decisions about pricing and costs.
How to Use the Profit Margin Calculator
Analyze your profitability in three simple steps:
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Enter Selling Price
Input the price at which you sell each unit to customers.
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Enter Cost Price
Include all costs per unit: product cost, shipping, platform fees, payment processing, and any other variable costs.
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Add Fixed Costs (Optional)
Enter your monthly fixed expenses like rent, subscriptions, and salaries to calculate your breakeven point.
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Analyze Your Results
Review your profit margin percentage, profit per unit, markup, and breakeven analysis to make informed business decisions.
Frequently Asked Questions
What's the difference between profit margin and markup?
Profit margin is the percentage of the selling price that's profit (profit ÷ selling price). Markup is the percentage added to cost (profit ÷ cost). Example: If you buy at $60 and sell at $100, your profit is $40. Margin = 40% ($40/$100), Markup = 67% ($40/$60).
What is a good profit margin?
It varies by industry. Retail typically sees 20-40%, restaurants 5-15%, software 70-90%. Generally: Below 20% is tight, 20-30% is fair, 30-50% is good, and above 50% is excellent. Compare against your specific industry standards.
How do I calculate my true cost price?
Include everything: product cost, shipping to you, platform fees (as a percentage of selling price), payment processing fees, packaging, storage, returns, and labor. Many businesses underestimate costs and overestimate margins as a result.
What is a breakeven point?
The breakeven point is where total revenue equals total costs - you're neither making profit nor loss. It's the minimum number of units you must sell to cover your fixed costs. After this point, each sale contributes to profit.
Should I include my salary in fixed costs?
If you're a business owner, yes. Many entrepreneurs forget to pay themselves. Include a reasonable salary in your fixed costs to understand if your business can truly sustain you financially.
My margin is low. What should I do?
You have four options: (1) Increase prices if the market allows, (2) Reduce costs through better suppliers or efficiency, (3) Add value to justify higher prices, or (4) Increase volume to benefit from economies of scale.
How often should I check my margins?
Check monthly at minimum. Costs change (suppliers raise prices, shipping increases), and you need to adjust pricing accordingly. Many businesses lose profitability slowly without realizing it until it's too late.
Can I have a negative profit margin?
Yes, if your costs exceed your selling price. This means you lose money on each sale. It's only sustainable temporarily (like during promotions or market entry) and must be corrected quickly or you'll go out of business.
What's the difference between gross and net profit margin?
Gross profit margin only considers direct costs (like this calculator does). Net profit margin includes all expenses including taxes, interest, and overhead. Both are important - gross shows product profitability, net shows overall business health.
How do I improve my profit margins?
Strategies include: negotiating better supplier rates, increasing prices strategically, reducing waste, improving operational efficiency, focusing on higher-margin products, adding value-added services, or increasing order values through bundling.