Margin Calculator
Calculate profit margins and selling prices
£
£
units
Profit Margin
50%
Markup
100%
Profit per Unit
£50.00
Total Profit
£50.00
Total Revenue
£100.00
Total Cost
£50.00
Margin vs Markup
Profit Margin:
Percentage of selling price that is profit.
Formula: (Selling Price - Cost) ÷ Selling Price × 100
Markup:
Percentage added to cost price to get selling price.
Formula: (Selling Price - Cost) ÷ Cost × 100
Example: Cost £50, Selling Price £100
- Margin: 50% (£50 profit ÷ £100 selling price)
- Markup: 100% (£50 profit ÷ £50 cost)
Pricing Strategies
Cost-Plus Pricing:
Add a fixed markup to your cost price.
Value-Based Pricing:
Price based on perceived value to customer.
Competitive Pricing:
Price similar to competitors.
Penetration Pricing:
Low initial price to gain market share.
Premium Pricing:
High price to signal quality or exclusivity.
Healthy Margin Ranges
Retail:
- Clothing: 50-60% margin
- Electronics: 5-15% margin
- Jewellery: 40-60% margin
- Books: 40-45% margin
Services:
- Consulting: 60-80% margin
- Software: 80-90% margin
- Professional Services: 50-70% margin
Margins vary by industry, business model, and market conditions.
Margin Optimisation Tips
Increase Margins:
- Negotiate better supplier prices
- Reduce operational costs
- Add value through services
- Focus on premium products
- Improve operational efficiency
Monitor Regularly:
- Track margin trends
- Compare with competitors
- Adjust for market changes
- Review supplier costs