Retail Margin
Compute gross profit and margin between retail price and cost.
About Retail Margin
Gross profit is the retail price minus cost, and margin expresses that profit against the retail price while markup uses cost. Margin is how retailers price for profitability, and confusing it with markup silently changes the profit on every sale.
Formula
Retail Margin
Margin = (retail - cost) / retail x 100
- margin
- Profit as a share of the selling price
Worked example
With the default values below, Retail Margin returns Gross Profit of $8.00. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Retail price
- 20
- Cost price
- 12
Results
- Gross Profit
- $8.00
- Margin
- 40.0%
- Markup
- 66.7%
Step by step
- 1Values used
- 2Retail Margin
- 3Gross Profit= 8.00
- 4Margin= 40.0
- 5Markup= 66.7
Assumptions and limits
- The result is derived only from the 2 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation, tax or compounding frequency into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Frequently Asked Questions
How is Retail Margin calculated?
Margin = (retail - cost) / retail x 100 Gross profit is the retail price minus cost, and margin expresses that profit against the retail price while markup uses cost.
Why does Retail Margin matter?
Margin is how retailers price for profitability, and confusing it with markup silently changes the profit on every sale.
What values do I need to enter?
This calculator takes 2 inputs: Retail price, Cost price. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.