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Estimate product gross margin from the selling price and direct product cost.
Use this product margin calculator when reviewing catalog pricing, wholesale structure, or item-level profitability. The calculator is designed to give a fast answer, but the quality of the answer still depends on accurate inputs and a clear idea of what decision you are trying to support.
- Enter Revenue and Cost using the same units you plan to compare or report.
- Read the main gross profit margin first, then use the supporting outputs to understand the trade-offs behind that result.
- Compare your numbers with the worked examples below if you want a quick reasonableness check.
Margin and markup answer different business questions, so the calculator shows both. That helps when pricing products, reviewing offers, or understanding how efficiently revenue turns into profit. On this page, the primary output is gross profit margin.
Scenario 1: $129 selling price with $74 landed cost. Inputs used: revenue: 129, cost: 74. Example result: 42.64%. This product pricing setup produces a margin of 42.64%. Scenario 2: $44 selling price with $19 direct cost. Inputs used: revenue: 44, cost: 19. Example result: 56.82%. For this product line, gross margin comes out to 56.82%.
Core formula: gross margin = (revenue - cost) / revenue * 100. The calculator measures profit in dollars first, then shows both gross margin on revenue and markup on cost.
- Margin answers how much of revenue becomes profit.
- Markup answers how much profit you earn relative to cost.
Use this calculator when pricing products, reviewing campaign profitability, or checking whether costs are crowding out profit. Related paths for follow-up analysis include profit margin calculator, gross margin calculator, markup calculator, and gross profit calculator.
Most bad outputs come from a few repeated input errors or interpretation mistakes. Use this short checklist before relying on the result.
- Confusing margin with markup.
- Leaving out costs that materially affect unit economics.
- Looking only at revenue growth without monitoring gross profit quality.
