Profit Margin Calculator
Calculate gross margin, net margin, and markup instantly. Know your real profitability.
What is profit margin?
Profit margin is the percentage of revenue that becomes profit after all expenses are paid. It measures how efficiently a business turns sales into actual money in your pocket. Higher margins mean more flexibility, faster growth, and better resilience.
Gross margin vs net margin
Gross margin shows profitability after direct costs (COGS) only. It reveals how efficiently you produce or source your product.Net margin includes all expenses: operating costs, taxes, interest, and everything else. This is your true bottom line.
What is a good profit margin?
It varies by industry. Software and SaaS often see 70-90% gross margins and 15-30% net margins. E-commerce typically runs 20-40% gross and 5-15% net. Retail can be as low as 20-30% gross with 2-5% net. The key is your margin relative to competitors and your ability to sustain it.
How to improve profit margins
Raise prices (most effective but scary), reduce COGS through better suppliers or volume discounts, cut operating expenses, eliminate low-margin products, or improve operational efficiency. Small improvements compound: a 5% price increase with no volume loss flows entirely to profit.