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Profit margin is the percentage of revenue that remains as profit after subtracting costs. Formula: (Profit ÷ Selling Price) × 100. A 40% margin means 40¢ of every $1 in sales is profit.
Margin is profit as a percentage of selling price. Markup is profit as a percentage of cost. A 50% markup on a $50 cost gives $75 selling price, but the margin is only 33.3% (25/75). Markup is always higher than margin for the same numbers.
Ecommerce margins vary by niche; 20–40% is common after platform fees. Retail ranges from 25–50% (grocery lower, clothing higher). Use this calculator to compare your numbers to industry benchmarks.
Selling Price = Cost ÷ (1 − Margin/100). For example, to achieve 30% margin on a $70 cost: $70 ÷ 0.70 = $100 selling price.
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