What is the difference between margin and markup?

Margin is profit divided by revenue; markup is profit divided by cost. A 50% markup equals a 33.3% margin. Margin is always lower than markup for the same profit.

What is a good profit margin?

It varies by industry. Retail typically has 5-10% margins, software 20-30%, and luxury goods 50%+. Compare to industry benchmarks.

How do I improve my profit margin?

Increase prices, reduce costs (materials, labor, overhead), improve operational efficiency, or shift to higher-margin products/services.

Why does margin matter?

Profit margin indicates business health and sustainability. Low margins mean small revenue changes can eliminate profits. Higher margins provide buffers for downturns.

What is the difference between margin and markup?

Margin is profit divided by revenue; markup is profit divided by cost. A 50% markup equals a 33.3% margin. Margin is always lower than markup for the same profit.

What is a good profit margin?

It varies by industry. Retail typically has 5-10% margins, software 20-30%, and luxury goods 50%+. Compare to industry benchmarks.

How do I improve my profit margin?

Increase prices, reduce costs (materials, labor, overhead), improve operational efficiency, or shift to higher-margin products/services.

Why does margin matter?

Profit margin indicates business health and sustainability. Low margins mean small revenue changes can eliminate profits. Higher margins provide buffers for downturns.

Educational Tool — Estimates for educational purposes only. Not financial advice.Disclaimer

Understanding your profit margin is essential for sustainable business growth. This calculator shows both your profit margin (based on revenue) and markup (based on cost).

Profit Margin Calculator

Calculate profit margin and markup percentage from revenue and cost.

February 2026

Revenue / Selling Price

Cost

Your Results

Profit

$40.00

Profit Margin

40.00%

Markup

66.67

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Wally's Analysis uses GPT-4o-mini for educational interpretations. AI responses are not personalized financial advice and may be inaccurate. All core calculations are deterministic — AI only interprets results.AI Transparency →

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Industry-standard formulas vetted against IRS, SSA, BLS, CFPB. Client-side calculations. Regularly updated.

This calculator provides estimates for informational purposes only and does not constitute financial, tax, or legal advice. Consult a licensed professional before making financial decisions.

Updated: February 2026 · Methodology

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