Calculate your profit margin, markup percentage, and profit from revenue and cost. Works for individual products or your entire business — enter per-unit prices or total figures.
Profit margin
40%
$40.00 profit on $100.00 revenue
A 40% margin equals a 66.7% markup
Track profit margins across all your products
CartSaver monitors your e-commerce margins in real time and alerts you when profitability drops.
Learn about CartSaverProfit margin measures how much of your revenue you keep as profit. It is the single most important number for understanding whether your pricing works.
The formula is simple: Profit Margin = (Revenue - Cost) / Revenue x 100. If you sell a product for $100 and it costs $60 to make, your profit margin is 40%. That means you keep $0.40 of every dollar in revenue.
Markup is the flip side: it measures how much you add on top of cost. The same $100/$60 product has a 66.7% markup — you add $40 on top of a $60 cost. A common mistake is confusing the two: a 50% markup is not a 50% margin. A 50% markup gives you only a 33.3% margin.
Gross margin uses only direct costs (materials, manufacturing, COGS). Net margin includes all expenses — rent, salaries, marketing, taxes. Gross margin tells you if your pricing works at the product level; net margin tells you if your business is profitable overall.
Track your margins monthly and per product. A declining margin is an early warning sign of rising supplier costs, competitive pricing pressure, or discount overuse — and it is much easier to fix when you catch it early.
Profit margin benchmarks vary dramatically by industry. Click any industry below for a calculator pre-filled with typical defaults and actionable tips.
| Industry | Low | Typical Margin | High |
|---|---|---|---|
| E-Commerce | 10-20% | 30-50% | 60-80% |
| Retail | 20-30% | 40-50% | 55-65% |
| Restaurants | 3-5% net | 25-35% gross | 65-75% gross |
| Dropshipping | 10-15% | 20-30% | 40-50% |
| SaaS | 60-70% | 75-85% | 85-95% |
| Amazon FBA | 10-15% | 20-30% | 35-50% |
A "good" profit margin depends on your industry. Grocery and retail businesses operate at 2-5% net margins and consider that healthy, while SaaS companies target 75-85% gross margins. As a general rule, a 10% net profit margin is average, 20% is good, and 30%+ is excellent. More important than the absolute number is how your margin compares to direct competitors in your specific niche — and whether it is trending up or down over time.
Margin and markup both measure profitability but use different bases. Profit margin is profit divided by revenue (selling price): if you sell for $100 and it costs $60, your margin is 40%. Markup is profit divided by cost: the same product has a 66.7% markup ($40 profit / $60 cost). Margin is always lower than markup for the same transaction. Retailers often think in markup (keystone = 100% markup = 2x cost), while investors and analysts use margin. A common mistake is treating a 50% markup as a 50% margin — it is actually a 33.3% margin.
Subtract the cost from the selling price to get profit, then divide by the selling price and multiply by 100. Formula: Profit Margin = ((Selling Price - Cost) / Selling Price) x 100. For example, if you sell a product for $80 and it costs $50 to make, your profit is $30 and your profit margin is ($30 / $80) x 100 = 37.5%. To calculate markup instead, divide profit by cost: ($30 / $50) x 100 = 60% markup.