Profit Margin Calculator
Calculate gross profit, profit margin percentage, and markup from item cost and selling price.
Understanding the Profit Margin Calculator
Many classifieds sellers buy items to restore, refurbish, or flip. Distinguishing between profit margin (profit divided by revenue) and markup (profit divided by cost) is vital for ensuring your resale operations remain solvent.
How to Use This Tool
Enter the item acquisition or repair cost and your planned selling price. The tool provides your Gross Profit, Profit Margin (%), and Markup (%).
Calculation Methodology & Formula
The underlying calculation applies the following deterministic mathematical logic:
Gross Profit = Selling Price - Cost. Profit Margin (%) = (Gross Profit / Selling Price) × 100. Markup (%) = (Gross Profit / Cost) × 100.
Practical Classifieds Example
Real-World Scenario: An antique chair purchased for $50 and sold for $120 generates $70 gross profit, translating to a 58.33% profit margin and a 140% markup.
Important Limitations & Assumptions
Profit Margin Calculator FAQs
Margin looks at profit relative to total revenue (what you collect), while markup looks at profit relative to your original cost (what you spent).
No. Unless your cost is negative, profit margin is always capped under 100%. Markup, however, can easily exceed 100%, 200%, or more.
Flippers typically aim for a gross profit margin of at least 40% to 50% to cushion against shipping mishaps and holding periods.
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