Profit margin calculator
Use this calculator to check whether a product leaves enough gross profit. Enter cost, sale price, and target margin to see real margin, markup on cost, and the recommended price for your goal.
Main formulas
Margin = ((Sale price - Cost) / Sale price) x 100
Markup = ((Sale price - Cost) / Cost) x 100
Recommended price = Cost / (1 - Target margin / 100)
Quick example
If a product costs Q70 and sells for Q100, gross profit is Q30. Profit margin is 30% because Q30 is 30% of the sale price. Markup is 42.86% because Q30 is 42.86% of cost.
A 30% markup does not create a 30% margin. If cost is Q100 and you add 30% markup, the price is Q130 and the real margin is 23.08%.
When to use it
- Before publishing prices in a store or ecommerce catalog.
- To check whether a discount still leaves profit.
- To compare suppliers with different costs.
- To price alongside the Guatemala VAT calculator, break-even calculator, and business profitability calculator.
Common mistakes
- Calculating the percentage on cost and calling it margin.
- Forgetting card fees, shipping, packaging, or marketplace commissions.
- Pricing only from competitors without checking gross profit.
- Applying discounts without knowing the minimum acceptable margin.
It depends on the industry. High-volume products may work with lower margins, while services, specialized products, or slower-moving inventory often need higher margins.
Gross profit will be negative and margin may also be negative. That can make sense for one-time clearance, but not as a permanent price.
For consumer prices, taxes are often included in the displayed price. For profitability, separate tax, cost, and real gross profit.
Negotiate better cost, reduce waste, packaging, or fees, increase average order value, sell bundles, or limit discounts.