1. Find out your COGS (cost of goods sold). For example £30.

  2. Find out your revenue (how much you sell these goods for, for example £50).

  3. Calculate the gross profit by subtracting the cost from the revenue. £50 - £30 = £20

  4. Divide gross profit by revenue: £20 / £50 = 0.4.

  5. Express it as percentages: 0.4 * 100 = 40%.

  6. This is how you calculate profit margin... or simply use our gross margin calculator!


As you can see, margin is a simple percentage calculation, but, as opposed to markup, it's based on revenue, not on Cost of Goods Sold (COGS).

If you want to calculate mark-up review our

Retail Mark-up template

DOWNLOAD: Margin Calculator