Revenue & Margin Calculator
Instantly calculate margins, markups, and profits. Understand the critical difference between Markup % and Margin % to protect your bottom line.
Input Metrics
Markup vs Margin
The most common mistake in retail math.
Markup = Cost Multiplier
Use Markup when talking to suppliers or manufacturers. 'I need to mark this up 2x (100%)'.
Margin = Profit Ratio
Use Margin when talking to investors or accountants. 'We run at a 50% Gross Margin'.
The Limit
Markup can be infinite (e.g., 5000% on software). Margin can never exceed 99.9% (because Cost is never truly zero).
Execution Steps
Enter your Unit Cost (COGS). This includes materials, manufacturing, and direct labor.
Enter your desired Markup % OR your Target Price.
The calculator will automatically update the other fields.
Use the visual chart to see the ratio of Cost to Profit in your final price.
Pro Strategy
- Retailers often confuse Markup and Margin. If you want a 50% Margin, you must apply a 100% Markup.
- Always calculate margin based on the final selling price, not the list price, to account for potential discounts.
- Low margin industries (grocery) rely on high volume. High margin industries (SaaS, Jewelry) can survive on lower volume.
Core Concepts
Markup vs. Margin
Markup is the % added to the Cost. Margin is the % of the selling Price that is profit. A 50% Markup = 33% Margin.
Gross Profit
The absolute dollar amount you make on each sale (Price - Cost).
COGS (Cost of Goods Sold)
All direct costs involved in producing the item. Does not include indirect overhead like rent or marketing.
What is Revenue & Margin Calculator?
Margin analysis is the foundation of profitable commerce. It ensures that the selling price covers the cost of goods sold (COGS) and contributes enough to overhead (operating expenses). This calculator uses standard accounting formulas to toggle between Cost, Price, Margin, and Markup.
Best For
- • Setting initial prices for new inventory.
- • Negotiating with suppliers to see how cost savings impact the bottom line.
- • Verifying that a planned discount doesn't result in negative margin.
Limitations
- • Calculates Gross Margin only, not Net Margin (after taxes/rent).
- • Does not account for variable costs like credit card processing fees unless you add them to COGS.
- • Assumes a constant price (doesn't account for sales/promotions).
Alternative Methods
Break-Even Analysis
Better for understanding volume requirements to cover fixed costs.
Discount Ladder
Better for analyzing the impact of sales promotions.
Industry Applications
See how this methodology generates real revenue uplift in different sectors.
Boutique Clothing Store
Owner was marking up items by 50% (Keystone pricing) but losing money.
Realized 50% Markup is only 33% Margin. Operating costs were 40%.
Dropshipping Business
High ad costs were eating all profits.
Used the calculator to reverse-engineer the max COGS they could afford.