Free tool

Profit margin calculator

Enter what a product cost you and what you sell it for, and see the profit, the margin and the markup. Or start from the margin you want and get the price to charge.

I know
₹
₹

Profit margin

16.67%

Profit per unit
₹2,000.00
Margin (on selling price)
16.67%
Markup (on cost)
20%

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Margin is not markup

Margin is profit as a share of the selling price. Markup is profit as a share of the cost. A kurta bought at ₹1,000 and sold at ₹1,200 earns ₹200: a 20% markup, but a 16.7% margin.

The difference matters when you price. Adding 20% to cost does not earn a 20% margin. To earn 20% on the selling price, divide cost by 0.8: ₹1,000 ÷ 0.8 = ₹1,250.

Both figures should be worked out before GST. The GST you collect is not yours, and if you are registered the GST you paid on the purchase comes back as input tax credit, so neither belongs in the margin. If your selling price includes GST, tick the box and the calculator takes it out first.

Questions

Asked about this

Why look at margin per product rather than for the whole shop?

Because it varies widely between lines. A branded piece may earn a thin margin while unbranded basics, accessories and alterations earn far more, and markdowns at the end of a season cut into both. A shop-wide average hides which styles are paying the rent.

Should I include GST in the cost?

If you are GST-registered and claim input tax credit, no: use the cost before GST. If you are on the composition scheme or unregistered, the GST you paid is a real cost, so include it.

Is anything I type here saved or sent anywhere?

No. The calculator runs in your browser and makes no request with the figures you enter.

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