Profit Margin Calculator
Enter your revenue and costs to calculate your profit margins. See both gross margin (before overhead) and net margin (after all expenses).
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$
Direct costs: materials, labor, manufacturing
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Overhead: rent, utilities, salaries, marketing
Your Profit Margins
Gross Profit
$0
Gross Margin
0%
Net Profit
$0
Net Margin
0%
Breakdown
Revenue $0
− Cost of Goods Sold −$0
= Gross Profit $0
− Operating Expenses −$0
= Net Profit $0
How You Compare
Understanding Profit Margins
What is Profit Margin?
Profit margin measures how much of every dollar in sales a company keeps as profit. It's expressed as a percentage and is one of the most important metrics for measuring business health.
Gross vs Net Margin
Gross Margin
Revenue minus direct costs (COGS). Shows production efficiency before overhead. Formula: (Revenue - COGS) / Revenue × 100
Net Margin
Revenue minus ALL costs. Shows true profitability. Formula: (Revenue - COGS - Expenses) / Revenue × 100
Typical Margins by Industry
| Industry | Gross | Net |
|---|---|---|
| Software/SaaS | 70-85% | 15-25% |
| Retail | 25-50% | 2-5% |
| Restaurants | 60-70% | 3-9% |
| Manufacturing | 25-35% | 5-10% |
| Consulting | 80-90% | 15-25% |
| E-commerce | 40-60% | 5-10% |
How to Improve Your Margins
- • Raise prices – Test 5-10% increases; value-based pricing often works
- • Reduce COGS – Negotiate with suppliers, buy in bulk, optimize production
- • Cut overhead – Review subscriptions, renegotiate rent, automate tasks
- • Improve efficiency – Reduce waste, train staff, streamline processes
- • Focus on high-margin products – Analyze per-product margins, promote winners