Free Profit Margin Calculator for Small Business
Enter what a unit costs you and what you sell it for. This shows your profit margin — the percentage of your selling price that's actual profit, not the same thing as markup.
Example result
- You enter
- Cost per unit
- $52.00
- Selling price
- $80.00
- You get
- Profit per unit
- $28.00
- Profit margin
- 35.0%
Fictional numbers, to show how the result is laid out.
How it works
Profit margin tells you what share of a sale is actually yours to keep after covering what that item cost you. It's calculated as (Selling Price − Cost) ÷ Selling Price × 100 — the profit expressed as a percentage of what the customer paid, not of what you spent.
This is the number to watch when you're deciding whether a product line is actually worth running, not just whether it's selling. A product can have strong sales and still be quietly dragging your business down if the margin is too thin to cover overhead once you factor in rent, payroll, and everything else that doesn't show up in a per-unit cost.
Margin is easy to confuse with markup, which is a different calculation (profit as a percentage of cost, not of price) — see the Markup Calculator if that's what you actually need.
A worked example: a product sells for $80 and costs $52 to make or buy, so the profit is $28 and the margin is $28 / $80 = 35%. If you also pay $3 in card fees and shipping on each sale, the true profit is $25 and the margin falls to about 31%, which is why it pays to count every cost that comes with a sale.
Use the margin to compare products on equal terms, and check that it is enough to cover your own fixed costs. The break-even calculator shows how many sales that takes.
Who uses this
| Business type | How it's used |
|---|---|
| Salons & barbershops | Compare the cost of labor, products (dye, shampoo, blades), and overhead against the price of a haircut, color, or treatment. |
| Flower shops | Check the margin on a bouquet or arrangement after stems, floral foam, wrapping, and delivery costs. |
| Bakeries & coffee shops | Compare ingredient and labor cost per item against the menu price for pastries, coffee, and sandwiches. |
| Pet groomers & dog cafes | Work out margin on drinks, treats, or grooming add-ons after supply costs, staffing, and space. |
| E-commerce sellers | Check margin on a product after unit cost, packaging, and shipping before setting a listing price. |
| Restaurants & cafes | Compare plate cost — ingredients and portioning — against the menu price for each dish. |
| Retail stores | Check margin on a shelf item after wholesale cost, before deciding whether it's worth stocking. |
| Gyms & fitness studios | Check margin on a class pack or membership tier after instructor pay and space cost. |
Frequently asked questions
Q.What's the difference between margin and markup?
Margin is profit as a percentage of the selling price. Markup is profit as a percentage of your cost. The same $5 profit on a $15 sale is a 33% margin but a 50% markup — they're calculated on different bases, so don't use them interchangeably when pricing.
Q.What's a healthy profit margin for a small business?
It varies a lot by industry. Retail often runs 20-50%, services can run much higher since labor is the main cost, and razor-thin categories like grocery or wholesale distribution can be under 10%. Compare against others in your specific category rather than a general rule of thumb.
Q.Should I include shipping and fees in 'cost'?
For an accurate margin, yes — include everything that goes out the door for that unit: product cost, packaging, shipping, and payment processing fees. Leaving those out overstates your real margin.
Q.Is this the same as a margin calculator or gross margin calculator?
Yes — profit margin calculator, margin calculator, gross margin calculator, and sales margin calculator all describe the same calculation: profit as a percentage of the selling price.