Profit margin and markup calculator

The short answer

Profit margin is profit as a share of the selling price; markup is profit as a share of the cost. An item bought for ৳80 and sold for ৳100 makes ৳20 profit: a 20% margin but a 25% markup. Mixing the two up is the most common pricing mistake in a shop.

Profit per item

৳20

Selling price − cost

Profit margin

20%

Profit ÷ selling price × 100

Markup

25%

Profit ÷ cost × 100

Price for a 25% margin

৳106.67

Cost ÷ (1 − margin ÷ 100)

How it’s calculated

  • Profit = selling price − cost price.
  • Margin % = profit ÷ selling price × 100.
  • Markup % = profit ÷ cost price × 100.
  • Price for a target margin = cost ÷ (1 − margin ÷ 100).

Worked example

You want a 25% margin on a product that costs ৳300. Price = 300 ÷ (1 − 0.25) = ৳400. Adding 25% to cost would give ৳375 — a margin of only 20%.

Limits

  • Uses one cost per item. With changing purchase prices, use your average cost.
  • Doesn't include VAT, discounts or overheads such as rent.

Bisnesy works out the real margin on every sale from your moving-average purchase cost, and shows profit per product in its reports.

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Questions

What is a good profit margin for a shop?

It depends on the trade: fast-moving groceries often run on thin margins, while fashion, cosmetics and electronics accessories usually need wider ones. Compare against your own costs and overheads — the break-even calculator helps.

Should I price by markup or margin?

Either works if you're consistent. Just don't set a markup and read it as a margin — a 25% markup is only a 20% margin.

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