Profit Calculator

Cost and selling price answer three different questions

A product bought for $200 and sold for $300 produces $100 in gross profit. That same transaction has a 33.33% margin and a 50% markup. The profit calculator shows all three because they are not interchangeable:

• Profit = selling price − cost
• Profit margin = profit / selling price × 100
• Markup = profit / cost × 100

Used as a gross profit calculator, the result covers revenue minus the direct cost entered in the form. It does not silently deduct payroll, rent, payment fees or tax.

Margin and markup use different bases

A profit margin calculator divides by revenue; a markup calculator divides by cost. “Add 50% to cost” therefore gives a 33.33% margin, not 50%. This distinction matters when a supplier quotes markup while a retailer reports margin.

The profit margin formula is useful for comparing products with different selling prices. Markup is more practical when building a price from a known unit cost.

Work backwards from the margin you need

The Target Profit mode also acts as a selling price calculator. For a 40% target margin and a $120 cost, the required price is $200:

Selling price = cost / (1 − target margin / 100)

If the target is markup instead, multiply cost by 1 + markup/100. A 40% markup on $120 gives $168. The tool keeps these two routes separate so the same “40%” is not applied to the wrong base.

A discount can remove more profit than expected

Suppose cost is $200 and list price is $300. A 20% discount reduces the sale to $240, so gross profit falls from $100 to $40. The margin drops from 33.33% to 16.67%. Discount Impact displays the before-and-after amounts and flags a loss when the reduced price falls below cost.

Gross profit is not net profit

Gross profit uses direct product cost. Net profit also accounts for operating expenses, interest and tax. Include shipping, marketplace commission, packaging and expected returns in the cost field when you need a more realistic unit result, but do not describe it as full company net profit unless every relevant expense is included.

A loss is shown as a negative result. For a $75 cost and a $60 sale, the loss is $15 and the revenue-based loss margin is 25%. Quantity multiplies the cash result; it does not change the percentage.

If your question is how to calculate profit, first decide which cost belongs to one sale, then choose whether you need the cash amount, margin, markup or a target price. The broader margin calculator view is most useful when those figures are read together.