📊 Business
Profit Margin Calculator
Understand your real profitability with our profit margin calculator. See the margin percentage, markup, and actual dollar profit per unit. Essential for pricing strategy and business planning.
IM MET
How to Use This Tool
- Enter the cost of the product or service (what you pay to produce or acquire it).
- Enter the selling price (what the customer pays).
- Click Calculate to see your profit margin, markup percentage, and profit per unit.
The Formula
Profit Margin = (Profit / Selling Price) x 100 where Profit = Selling Price - Cost. Markup = (Profit / Cost) x 100. Margin and markup are different — margin is based on revenue, markup on cost.
Why It Matters
Your SaaS product charges $99/month with $15/month server costs and $20/month payment processing. Your 70.7% gross margin looks good, but after adding $30/month customer support, your true margin drops to 40.4%.
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