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Calculate profit, margin percentage, and markup percentage from cost and selling price — and see the key difference between margin and markup that retailers routinely confuse.
Financial
Generated on May 23, 2026
Calculate profit, margin percentage, and markup percentage from cost and selling price — and see the key difference between margin and markup that retailers routinely confuse.
A profit margin calculator computes the profit earned per unit, the profit margin percentage (profit as a share of selling price), and the markup percentage (profit as a share of cost). Margin and markup are different but related — knowing both helps you price products correctly, compare business performance, and evaluate investment opportunities.
Formula
Profit = Selling Price − Cost. Margin% = (Profit ÷ Selling Price) × 100. Markup% = (Profit ÷ Cost) × 100.If you're running a Daraz storefront, a small home-based brand on Instagram, a restaurant in Lahore, or a wholesale operation supplying retailers — and you can't immediately tell me whether your products are running on margin or markup, you're guessing your way through pricing, and the cost of that guesswork compounds every month. Margin (profit ÷ selling price) and markup (profit ÷ cost) are mathematically related but routinely confused — and underpricing because of the confusion is the single most common mistake small Pakistani businesses make. A 50 percent markup feels like a healthy fat profit, but it's actually only a 33 percent margin — meaning for every PKR 100 of revenue, you keep PKR 33, not PKR 50. The difference shows up sharply at the end of the month when your bank balance doesn't match what your profit calculations promised. Industry benchmarks matter too: groceries run on 2-5 percent margins (which is why supermarkets need scale), restaurants 5-15 percent, software-as-a-service 70-90 percent, jewelry 20-40 percent on gold and 100+ percent on costume pieces. Always benchmark against YOUR industry, not against generic "good profit" advice. Honest take: the fastest path to better margins for most small Pakistani businesses isn't cutting costs (which is hard) — it's raising prices in increments of 5-10 percent and watching what actually happens to sales volume. Most customers don't notice; the ones who do leave were probably your worst customers anyway.
A profit margin calculator computes the profit earned per unit, the profit margin percentage (profit as a share of selling price), and the markup percentage (profit as a share of cost). Margin and markup are different but related — knowing both helps you price products correctly, compare business performance, and evaluate investment opportunities.
Margin uses selling price as the denominator (revenue-centric view), while markup uses cost as the denominator (cost-centric view). Same profit in dollars, different percentages — this is why margin is always less than markup.
The most common source of confusion in pricing: how margin and markup percentages map to each other.
| Markup % | Margin % | Example: Cost $100 | Example: Sell Price |
|---|---|---|---|
| 10% | 9.09% | $100 | $110 |
| 20% | 16.67% | $100 | $120 |
| 25% | 20% | $100 | $125 |
| 33.33% | 25% | $100 | $133.33 |
| 50% | 33.33% | $100 | $150 |
| 67% | 40% | $100 | $167 |
| 100% | 50% | $100 | $200 |
| 200% | 66.67% | $100 | $300 |
| 300% | 75% | $100 | $400 |
| 400% | 80% | $100 | $500 |
A 50% markup is only a 33% margin — retailers routinely confuse these and under-price.
Restaurants target 60–75% food-cost margin (25–40% food cost).
Software-as-a-Service averages 70–90% gross margin — extraordinary vs physical retail.
Jewellery stores typically mark up 100%+ on non-precious items; 10–30% on pure metals.
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