What is Profit Margin + Markup Calculator?
This calculator compares per-unit gross profit, gross profit margin, and markup from a unit cost and selling price. Margin divides profit by selling price; markup divides it by cost, so the percentages differ even when they describe the same unit.
When to use it
Use it to compare gross profit margin with markup when reviewing a price or a per-unit cost.
How the methodology works
Subtract unit cost from selling price for gross profit. Gross margin divides that profit by selling price, while markup divides it by unit cost.
- Enter a direct cost and selling price for one unit in the same currency.
- Subtract cost from selling price to get gross profit per unit.
- Divide gross profit by selling price for gross margin, then divide gross profit by cost for markup.
- Treat the result as a per-unit gross comparison. It excludes overhead, taxes, fees, discounts, and other costs unless those are included in the unit cost.
Example: A fictional product priced at $100
Illustrative situation: A seller enters a $60 unit cost and a $100 selling price.
How to apply it: Gross profit is $40 per unit. Gross margin is $40 ÷ $100 = 40%. Markup is $40 ÷ $60 = 66.67%. The percentages differ because margin uses selling price as its denominator and markup uses cost.
Example limits: This scenario is illustrative, not evidence about a real business. Use evidence relevant to your decision for your own facts, ratings, probabilities, or financial estimates.
How to read the result
Margin and markup use different denominators. This is a per-unit gross calculation, not net margin, and it excludes overhead, fees, discounts, and taxes.
Questions about Profit Margin + Markup Calculator
Why is markup higher than margin in the example?
Both use the same $40 gross profit. Dividing by the $60 cost produces a larger percentage than dividing by the $100 selling price.
Is this net profit margin?
No. It is a per-unit gross calculation from the values entered. It does not subtract overhead, tax, payment fees, discounts, or other costs not included in unit cost.
Why is markup not shown when unit cost is zero?
Markup divides gross profit by unit cost. With a zero denominator, that percentage is undefined.
Next step
Check which costs belong in your unit-cost assumption, then review gross margin and markup separately before comparing prices.
Need a printable resource or a step-by-step method? Competitor pricing analysis guide. Compare observed offers manually, then check your own per-unit margin assumptions.