Profit Margin Calculator
Calculate profit, margin percentage, markup, revenue and total profit from your cost and selling price, or calculate the selling price required for a target profit margin.
Calculate Profit Margin
Enter your cost price and selling price to calculate profit, margin and markup.
Profit & Pricing Summary
Your calculated margin, markup and profit results.
Enter your values and calculate.
Margin % = (Selling Price โ Cost Price) รท Selling Price ร 100
Profit margin and markup are not the same
Both measure profitability, but they use different values as the calculation base.
Profit Margin
Profit margin measures profit as a percentage of the selling price.
Profit รท Selling Price ร 100Markup
Markup measures profit as a percentage of the cost price.
Profit รท Cost Price ร 100Cost QAR 100 and selling price QAR 150
If an item costs QAR 100 and sells for QAR 150, the profit is QAR 50 per unit.
Profit: QAR 50 โข Margin: 33.33% โข Markup: 50%
Calculate the price needed for your target margin
If you know your cost and the profit margin you want to achieve, DIXANI can calculate the required selling price.
Selling Price = Cost Price รท (1 โ Target Margin)
What costs should you include when calculating profit margin?
The accuracy of a profit margin calculation depends on the cost figure you use. The purchase price may be only one part of the real cost of selling a product or service.
Purchase or Production Cost
Start with the direct amount paid to purchase, manufacture or produce one unit of the product.
Freight and Delivery
Inbound freight, courier charges and transportation costs may need to be included when determining the true cost of bringing the item into your business.
Packaging and Handling
Boxes, bags, labels, packing materials and other direct handling expenses can reduce the actual profit earned from each sale.
Marketplace and Payment Fees
E-commerce commissions, payment-processing charges and marketplace fees may reduce the amount retained from the selling price.
Import Duties and Related Costs
For imported products, customs duties, clearance charges and other direct import expenses may form part of the effective product cost.
Other Direct Selling Costs
Consider other costs directly connected with each sale when they are relevant to your business and pricing decision.
Important: This calculator uses the cost value you enter. It does not automatically add freight, taxes, commissions, packaging or other business expenses. Include the costs that are relevant to the profitability measure you want to evaluate.
Common mistakes when calculating profit margin
A simple calculation can give misleading results when the wrong costs, percentages or pricing assumptions are used.
Confusing Margin with Markup
A 30% markup does not produce a 30% profit margin. Markup is based on cost, while margin is based on selling price.
Using Only the Purchase Price
Freight, packaging, marketplace fees and other direct costs can reduce actual profitability if they are excluded from the cost used in the calculation.
Ignoring Discounts
A discount reduces the actual selling price and therefore changes the profit and margin earned on the sale.
Setting Prices from Margin Alone
A target margin is useful, but pricing decisions may also need to consider customer demand, competitors, taxes and other business requirements.
Useful for everyday pricing decisions
The calculator can support straightforward pricing and profitability analysis for products and services.
Small Businesses
Check profit margin before setting or changing prices.
E-commerce Sellers
Compare product cost, selling price and profitability.
Retail Operations
Understand margin and markup for individual products.
Service Businesses
Estimate profitability where cost and selling price are known.
Profit Margin Calculator โ Frequently Asked Questions
How do I calculate profit margin?
Subtract cost price from selling price to get profit, divide the profit by the selling price and multiply the result by 100.
What is the difference between margin and markup?
Margin expresses profit as a percentage of selling price. Markup expresses profit as a percentage of cost price.
How do I calculate a selling price from a target margin?
Divide the cost price by one minus the target margin expressed as a decimal. For example, a 30% margin uses Cost รท 0.70.
Can profit margin be negative?
Yes. If the selling price is below the cost price, the result represents a loss and the calculated profit margin will be negative.
Does quantity affect the margin percentage?
No. Quantity changes total revenue, total cost and total profit, but it does not change the per-unit profit margin when cost and selling price remain the same.