Profit margin and markup calculator
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.
Try Bisnesy free for 7 daysQuestions
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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