Profit margin calculator
Enter a cost and a selling price to see the gross profit, the profit margin and the markup side by side. Seeing both at once is the point: they are different numbers, and treating them as interchangeable is one of the most common ways a small business underprices itself.
Margin and markup are not the same number and confusing them is how businesses quietly underprice. A 50% markup on a S$60 cost gives a S$90 price, which is only a 33.3% margin.
Margin and markup are not the same
Markup measures profit against cost. Margin measures profit against the selling price. Because the selling price is always the larger number, the margin is always the smaller percentage.
A 50% markup on a S$60 cost gives a S$90 price and a S$30 profit — which is a 33.3% margin, not 50%. A supplier quoting "50% margin" and a salesperson hearing "50% markup" are talking about a S$120 price and a S$90 price respectively.
Pricing to a target margin
To hit a target margin, divide the cost by one minus the margin. For a 40% margin on a S$60 cost: 60 ÷ 0.6 = S$100. Adding 40% to the cost would give S$84, which is only a 28.6% margin.
This single arithmetic mistake, repeated across a price list, is enough to make a business look busy and profitable while quietly running below its target.
Questions
What is the difference between margin and markup?
Markup is profit as a percentage of cost. Margin is profit as a percentage of the selling price. For the same transaction the markup is always the higher percentage.
How do I calculate profit margin?
Subtract cost from selling price to get gross profit, then divide by the selling price and multiply by 100.
How do I price to a target margin?
Divide the cost by (1 − target margin). For a 40% margin on a S$60 cost, S$60 ÷ 0.6 = S$100.
A calculator answers one question once. Digital 9 Labs builds the system that answers it continuously — your real numbers, updated as the work happens, without anyone reopening a spreadsheet.