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Enter your cost and selling price to instantly calculate your profit margin, markup, and gross profit. Free for Indian merchants and eCommerce businesses.
Total cost to produce or procure the item, including material, labour, and overhead.
Price at which the item is sold to the customer.
Profit margin
Profit as a percentage of your selling price
Within typical D2C eCommerce range (25–50%)
Gross profit
Revenue minus cost of goods sold.
Markup
Profit as a percentage of the cost price.
A D2C brand sells handmade cotton totes. Each unit costs ₹480 to produce (materials, stitching, and packaging) and sells for ₹850 online.
Production cost per unit
Customer-facing price
Gross profit
₹850 minus ₹480
Profit margin
₹370 ÷ ₹850 × 100
The markup on this product is 77.1% (₹370 ÷ ₹480 × 100), a different figure from the margin because markup divides by cost, not revenue.
The total amount you spend to produce or buy each unit: materials, labour, packaging, and import duties. Exclude GST you reclaim as input credit.
The price your customer pays. If you are GST-registered, enter the ex-GST amount. GST you collect on behalf of the government is not part of your revenue.
Profit margin and markup update instantly as you type. Margin is profit as a share of revenue. Markup is profit as a share of cost. The two are not the same number.
Profit Margin (%) = ((Selling Price − Cost Price) / Selling Price) × 100
Markup (%) = ((Selling Price − Cost Price) / Cost Price) × 100
Margin and markup use the same gross profit figure but different denominators. Margin divides by selling price; markup divides by cost price. They are not interchangeable.
Assumptions
Gross margin compares to product cost only. Net margin accounts for all operating costs including gateway fees, shipping, rent, and salaries.
| Category | Typical gross margin | Typical net margin | Notes |
|---|---|---|---|
| Fashion / apparel | 40–60% | 10–20% | High creative margin; returns and logistics reduce net |
| Electronics | 5–20% | 2–8% | Thin margins; volume and warranty cost are the key variables |
| Software / SaaS | 70–90% | 15–30% | Near-zero COGS; R&D and sales are the major cost lines |
| F&B / QSR | 60–70% (food cost) | 3–9% | High ops costs; food cost below 30% of price is the target |
| Retail / FMCG | 20–40% | — | Shrinkage, distribution, and promo spend compress net |
| D2C eCommerce | 25–50% | 5–15% | Gateway MDR, returns, and CAC are the biggest margin erodes |
Indian eCommerce benchmarks: payment gateway MDR (typically 1.5–2.5%) and return rates (10–30% for fashion) are among the largest net margin compressors versus global peers.
Profit margin expresses profit as a share of the selling price — what portion of revenue you keep. Markup expresses profit as a share of the cost — how much you added on top. A 60% markup does not mean a 60% margin. For a ₹500 item sold at ₹800, the markup is 60% but the margin is 37.5%. Mixing them up leads to systematic underpricing.
Industry benchmarks vary widely. Fashion and apparel often target 40–60% gross margin. Electronics run on thinner margins of 5–20%. Software and digital products can exceed 70%. The key is tracking margin net of all variable costs — including payment processing fees, returns, and shipping — not just product cost.
Payment processing fees (MDR) are a variable cost that reduces effective gross margin. For a product sold at ₹1,000 with a 2% MDR, ₹20 goes to the gateway — reducing margin from, say, 40% to 38%. At high volumes this adds up, making gateway fee negotiation and fee structure comparison a meaningful margin lever for growing merchants.
Gross margin subtracts only the cost of goods sold. Net margin subtracts all expenses including rent, salaries, marketing, gateway fees, taxes, and interest. A business with a 40% gross margin but high overheads can still run at a net loss. Track both to understand where margin is consumed.
Profit margin is the percentage of your selling price that becomes profit after subtracting the cost to produce or buy the item. A 37.5% margin means ₹37.50 of every ₹100 in revenue is profit before overhead and taxes.
Both measure how much you earn above cost, but using different bases. Margin divides profit by the selling price. Markup divides profit by the cost price. A 60% markup and a 37.5% margin can describe the same transaction — they are not interchangeable.
Enter the cost price (what you paid to produce or buy the item) and the selling price (what the customer pays). The calculator returns gross profit in rupees, profit margin as a percentage of selling price, and markup as a percentage of cost.
It depends on the category. Retail and FMCG often operate at 5–20% net margin. Fashion and lifestyle goods target 30–50% gross margin. Service businesses typically have higher margins. The priority is knowing your margin net of all variable costs, not just product cost.
If you are GST-registered and collect GST on behalf of the government, the GST component is not your revenue — it flows back to the government. Calculate margin on the base price (ex-GST). Include only your actual revenue and actual cost of goods.
Calculator outputs are estimates based on the values you enter. They are for planning and education purposes only and do not constitute financial, tax, or legal advice. Actual amounts may vary based on applicable regulations, your business category, lender terms, and individual circumstances.