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Profit Margin Calculator

Calculate gross and net profit margins instantly. Optimize your pricing strategy and track your business's bottom line.

Margin Parameters

$
$

Need to calculate your break-even point?

Find exactly how many units you need to sell to cover all costs.

Understanding Your Profitability

Whether you are selling physical products on Shopify or providing digital services, understanding the difference between your gross and net margins is critical for long-term survival.

Our Profit Margin Calculator helps you see exactly how much profit you keep from every sale. By entering your costs and expenses, you can determine if your current pricing supports your overheads and advertising budgets.

Markup vs. Margin

Markup is the percentage added to cost to get the price. Margin is the percentage of the final price that is profit. A 100% markup results in a 50% margin. This calculator helps you stay focused on the margin—the actual money you keep.

Ad Scaling Room

Your gross margin determines your maximum ROAS limit. If your margin is 50%, your break-even ROAS is 2.0x. Use this tool to ensure you have enough 'buffer' to pay for customer acquisition.

Profit Margin Examples

The $50 Product

You sell a product for $50.00. It costs you $30.00 to source. Your profit is $20.00, resulting in a 40% gross margin. If you spend $5.00 on ads and $5.00 on shipping, your net profit is $10.00 (20% net margin).

Targeting 60% Margin

If your item costs $12.00 and you want a 60% margin, you must sell it for $30.00 ($12 / 0.4). This ensures that $18 of every sale is available to cover your other business expenses.

Related Pricing Tools

Break-Even Tool

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ROAS Calculator

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Ad Budget Planner

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Frequently Asked Questions

What is profit margin?▼
Profit margin is a percentage that expresses how much out of every dollar of sales a company actually keeps in earnings. It is a key indicator of a business's pricing strategy and cost control.
Gross margin vs net margin?▼
Gross margin only subtracts the direct cost of making the product (COGS) from revenue. Net margin subtracts ALL expenses, including rent, marketing, taxes, and interest. Net margin is the ultimate 'bottom line' profitability.
What is a good margin for ecommerce?▼
A standard gross margin for ecommerce is usually between 50% and 70%. A healthy net margin is often between 10% and 20%, though this varies significantly depending on your industry and stage of growth.
How do ads affect margin?▼
Ad spend is an operating expense. While it doesn't affect your gross margin (per unit), it directly reduces your net margin. High ad costs can quickly turn a profitable gross margin into a net loss.
How to price products for a target margin?▼
To reach a target margin, use the formula: Price = Cost / (1 - Margin%). For example, if a product costs $50 and you want a 40% margin: $50 / (1 - 0.40) = $83.33.
Why is my margin negative?▼
A negative margin means your costs are higher than your revenue. This usually happens if you haven't accounted for all variable costs or if you are running deep discounts that exceed your markup.
Does margin include shipping and tax?▼
In a strict sense, gross margin should include direct shipping costs if you offer 'free shipping.' Sales tax collected from customers is usually excluded from revenue calculations as it is passed through to the government.
Is my data stored?▼
No. All financial calculations are performed in your browser. We never see, store, or share your pricing or revenue data.