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Profit Margin Calculator

Calculate gross profit margin, cost markup, and unit profit from your cost and selling price.

Cost & Price Inputs

Unit-level product pricing and margin variables

৳

Direct wholesale product cost, raw materials, or service delivery cost per unit.

৳

Actual or intended retail selling price charged to customers.

Unit Economics Summary

Profit Per Unit

BDT 40

Gross Margin: 40.0% of selling price

Selling Price

BDT 100

Unit cost: BDT 60

Gross Margin

40.0%

Share of selling price

Cost Markup

66.7%

Added above unit cost

Cost Share of Price

60.0%

COGS % of revenue

Price Structure SplitBDT 100 total
Cost (60%)
Profit (40%)
Direct Cost: BDT 60Gross Profit: BDT 40

Margin & Pricing Insights

  • A 66.7% markup on cost generates a 40.0% profit margin on price.
  • For each unit sold at BDT 100, you earn BDT 40 in gross unit profit after recovering BDT 60 in direct unit cost.
  • To achieve a 40% margin at a BDT 60 unit cost, your selling price must be BDT 100 (66.7% markup).
Target Margin Price Simulator

Simulate the required retail price and profit per unit at your current BDT 60 cost.

40% Target Margin
5%70%

Required Price at 40% Margin

To retain 40% of every sale with a BDT 60 unit cost:

BDT 100

+BDT 40 unit profit

Margin vs. Matching Markup Benchmarks (10% to 50%)

Gross MarginMatching MarkupSelling PriceUnit Profit
10%11.1%BDT 66.67BDT 6.67
20%25.0%BDT 75BDT 15
30%42.9%BDT 85.71BDT 25.71
40%66.7%BDT 100BDT 40
50%100.0%BDT 120BDT 60

What is the Profit Margin Calculator?

A profit margin calculator is an essential unit-economics tool that determines the percentage of a product's selling price retained as gross profit after paying direct Cost of Goods Sold (COGS). Whether you sell physical merchandise, wholesale inventory, or packaged services, knowing your exact gross profit margin tells you how much room you have to fund marketing, payroll, and operations.

Because business owners frequently need to solve pricing from different starting points, this free gross profit margin calculator includes three calculation modes: compute margin and markup from your existing cost and price, reverse-engineer the exact selling price required to hit a desired margin percentage, or calculate selling price and margin from a cost-plus markup percentage.

How to use the Profit Margin Calculator

Follow these steps to analyze your unit margins and set profitable retail prices:

  1. Choose Your Calculation Mode: Select From Cost & Revenue to audit an existing price, From Cost & Desired Margin % to solve for a target selling price, or From Cost & Markup % to convert a cost-plus markup into gross margin.
  2. Enter Unit Cost (COGS): Input the direct manufacturing, wholesale sourcing, or fulfillment cost for a single unit.
  3. Enter Price, Margin, or Markup: Depending on your selected tab, type your selling price, target margin percentage, or markup percentage.
  4. Simulate Target Margins & Download PDF: Use the Target Margin Price Simulator slider (5% to 70%) and the benchmark table to compare pricing tiers, then export a client-ready A4 PDF report.

Profit Margin Calculator formula

The profit margin formula and its companion markup conversions are defined below:

Unit Gross Profit = Selling Price − Unit Cost
Profit Margin (%) = (Unit Gross Profit ÷ Selling Price) × 100
Cost Markup (%) = (Unit Gross Profit ÷ Unit Cost) × 100
Selling Price from Target Margin = Unit Cost ÷ (1 − (Margin % ÷ 100))
Selling Price from Cost Markup = Unit Cost × (1 + (Markup % ÷ 100))

Notice that in the margin vs markup formula, profit margin always divides by selling price, whereas markup always divides by unit cost.

Worked example

Using the exact default numbers in the calculator above, suppose you source a product for $60.00 and sell it for $100.00:

  • Unit Cost (COGS): $60.00
  • Selling Price (Revenue per Unit): $100.00
1. Unit Gross Profit = $100.00 − $60.00 = $40.00
2. Gross Profit Margin (%) = ($40.00 ÷ $100.00) × 100 = 40.0%
3. Equivalent Cost Markup (%) = ($40.00 ÷ $60.00) × 100 = 66.7%
4. Reverse Price Check (at 40% Margin) = $60.00 ÷ (1 − 0.40) = $100.00

Every unit sold generates $40.00 in gross profit, meaning 40.0% of the retail price is retained to cover customer acquisition and operating overhead, while 60.0% recovers the direct product cost.

Why it matters

Knowing how to calculate profit margin accurately protects your business from underpricing. A 5% or 10% error in gross margin might seem minor on a single unit, but across thousands of orders it determines whether your company can afford paid customer acquisition, wholesale discounts, or seasonal promotions.

By benchmarking your unit margin before committing to supplier purchase orders or retail price lists, you ensure every sale contributes meaningfully toward fixed overhead and net earnings.

Frequently asked questions

While both metrics measure unit profitability, they use different denominators. Profit margin expresses profit as a percentage of the selling price (Revenue), showing how much of each sales dollar you retain. Markup expresses profit as a percentage of the unit cost (COGS), showing how much above cost you price your product.

Last updated: October 2026

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Estimates only, not financial advice: All figures produced by Threeaid are mathematical estimates based on your inputs. They should not replace professional accounting, tax, or legal counsel.