Profit Margin Calculator 💰
Calculate gross profit, margin %, markup %, ROI, break-even, and selling price from target margin. Free, instant, no login.
📊 Profit Margin Benchmarks by Industry — 2026
Compare your margin against typical industry ranges. Gross margin is before overhead; net margin is after all expenses.
| Industry | Gross Margin | Net Margin | Notes |
|---|---|---|---|
| SaaS / Software | 65–80% | 15–30% | Highest margins; low COGS |
| Beauty & Skincare | 55–70% | 10–20% | High margin; heavy marketing spend |
| Fashion & Apparel | 40–60% | 5–15% | Returns and inventory risk reduce net |
| E-commerce (General) | 25–45% | 5–15% | Varies widely by niche |
| Dropshipping | 20–30% | 10–20% | No inventory; lower gross margins |
| Wholesale / Distribution | 15–25% | 2–5% | Volume-dependent business |
| Retail (Brick & Mortar) | 25–40% | 2–5% | High overhead reduces net margin |
| Restaurant / Food Service | 60–70% | 3–8% | High labor and rent eat net margin |
| Amazon FBA | 25–40% | 10–20% | After Amazon fees; storage costs vary |
| Freelance / Services | 70–90% | 30–60% | No COGS; time is the cost |
Free Profit Margin Calculator — Gross Margin, Markup & Break-Even Online
Our free profit margin calculator helps e-commerce sellers, retailers, dropshippers, Amazon FBA sellers, and small business owners calculate gross profit, profit margin percentage, markup percentage, ROI, and break-even point instantly. Whether you are pricing a new product for your Shopify store, calculating Amazon FBA profitability, or figuring out whether a wholesale deal is worth taking, this tool gives you a complete profitability picture in seconds — including a reverse calculator to find the selling price or maximum cost from any target margin.
Profit Margin vs Markup — What Is the Difference?
This is the most common source of pricing confusion for new sellers. Profit margin = (Profit ÷ Selling Price) × 100. Markup = (Profit ÷ Cost) × 100. Same transaction, different denominators. Example: cost $50, selling price $100, profit $50. Margin = (50 ÷ 100) × 100 = 50%. Markup = (50 ÷ 50) × 100 = 100%. A 50% margin and a 100% markup describe the same pricing — they just use a different base. Markup is always a higher number than margin for the same product. If someone asks for a "30% margin," never add 30% to cost — that gives a 30% markup (23% margin). Always use the correct formula for the metric being requested.
How to Calculate Selling Price from a Target Profit Margin
To find the correct selling price that achieves a specific gross margin, use: Selling Price = Cost ÷ (1 − Target Margin%). For a product costing $40 with a target 50% margin: Price = $40 ÷ (1 − 0.50) = $40 ÷ 0.50 = $80. Many sellers make the mistake of adding the margin to the cost (adding 50% to $40 to get $60) — but $60 actually gives a 33% margin, not 50%. The reverse calculator in this tool handles this correctly. This calculation is critical for Shopify sellers setting retail prices, Amazon FBA sellers accounting for platform fees, and wholesalers negotiating bulk pricing.
Gross Profit vs Net Profit — What Is the Difference?
Gross profit = Revenue − Cost of Goods Sold (COGS). It measures profitability before overhead. Net profit = Gross Profit − All operating expenses (rent, salaries, marketing, software, shipping, taxes). A business with 60% gross margin can still be unprofitable if overhead consumes more than 60% of revenue. The break-even calculator in this tool shows how many units you need to sell monthly to cover fixed overhead at your current pricing — the critical number for any product-based business.
What Is a Good Profit Margin in 2026?
Good margins vary dramatically by business model. Dropshipping: target 20–30% gross margin minimum to cover ad costs. Amazon FBA: 25–40% gross after product cost, aiming for 10–20% net after Amazon fees (typically 15% referral + FBA fees). Shopify e-commerce: 30–50% gross is competitive. SaaS and software: 65–80% gross is standard. Retail: 25–40% gross, 2–5% net after rent and staff. Freelance services: 70–90% gross (your time is the main cost), 30–60% net. Always compare gross margin to industry benchmarks but use net margin to evaluate real business health.
What Makes This Calculator Different?
Most free margin calculators show 3 numbers. This tool adds ROI, cost ratio, profit per $1 revenue, a margin performance rating, a reverse calculator (selling price from target margin, or max cost from selling price and target margin), a break-even calculator (units per month from overhead), and a 2026 industry benchmark table covering 10 sectors. All calculations run instantly in the browser.
Frequently Asked Questions
What is profit margin and how do you calculate it?
Profit Margin = ((Selling Price − Cost) ÷ Selling Price) × 100. Example: cost $50, price $120, margin = (70 ÷ 120) × 100 = 58.3%. Always calculated as % of selling price — not cost.
What is the difference between profit margin and markup?
Margin uses selling price as base; markup uses cost. Same $50 profit on $100 sale = 50% margin but 100% markup. Markup is always higher than margin. Never confuse them when pricing products.
What is a good profit margin for retail and e-commerce?
E-commerce: 25–45% gross. Dropshipping: 20–30%. Amazon FBA: 25–40% gross, 10–20% net. SaaS: 65–80%. Retail: 25–40% gross, 2–5% net. Check the benchmark table above for your industry.
How do I calculate selling price from a target profit margin?
Selling Price = Cost ÷ (1 − Target Margin%). For 40% margin on $50 cost: $50 ÷ 0.60 = $83.33. Use the Reverse Calculator section above — enter cost and target margin to get the correct selling price.
What is break-even point and how do I calculate it?
Break-even Units = Fixed Costs ÷ (Price − Variable Cost). $5,000 overhead, $100 price, $50 cost = 100 units/month. Use the Break-Even Calculator section with your monthly overhead.
What is the difference between gross profit and net profit?
Gross profit = Revenue − COGS only. Net profit = Gross Profit − all overhead (rent, salaries, marketing). High gross margin + high overhead = low or negative net profit. Both matter for business health.
About This Tool
This Profit Margin Calculator was built by the FreeImageTools team — e-commerce sellers, dropshippers, and small business owners who calculate margin and pricing daily. The original tool showed 3 numbers. We rebuilt it with 6 profitability metrics (gross profit, margin, markup, ROI, cost ratio, profit per $1), a margin rating label, a reverse calculator (find selling price or max cost from target margin), a break-even units calculator, and a 2026 industry benchmark table covering 10 sectors from SaaS to Amazon FBA. All calculations run in the browser. Reviewed in July 2026.