Free tool
Profit margin calculator
Find your margin and markup from cost and selling price, or the price you need for the margin you want.
Runs in your browser. Nothing you type is sent to billinginfo.
Margin and markup are not the same
Margin is profit as a share of the selling price: (price − cost) ÷ price × 100. Markup is profit as a share of the cost: (price − cost) ÷ cost × 100. Buy at ₹80, sell at ₹100: the profit is ₹20, the margin 20% and the markup 25%.
To get a 20% margin on an item costing ₹80, the price is 80 ÷ (1 − 0.20) = ₹100, not 80 + 20% = ₹96. Mixing the two up is one of the commonest pricing mistakes in a shop.
What about GST?
For a registered business that claims input tax credit, work out margins on prices before GST: the GST you collect is passed on to the government, and the GST you paid comes back as credit. If you sell at an MRP that includes GST, take the GST out first with the GST calculator. Composition dealers can’t claim credit, so their cost includes GST.
See your real margins
The billinginfo app shows the profit on each invoice and a profit and loss report, using your purchase prices, so you can see which items earn their shelf space.
What is a good margin for a retail shop?
It varies by trade: groceries run on thin margins and high volume, while garments, gifts and cosmetics usually need much higher margins to cover slow stock and discounts.
Can the margin be more than 100%?
No: margin is a share of the price, so it is always below 100%. Markup can be any size: an item bought at ₹50 and sold at ₹150 has a 200% markup and a 66.67% margin.
Should discounts come out of my margin?
Yes. Work out the margin on the price after discount. The discount calculator gives you that price.
Your next bill can
be a better one.
Free for 15 invoices a month. Try Plus for a week at ₹9. On your Android phone and in your browser.
