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Retail margin calculator formula
Subtract unit cost from selling price to get merchandise gross profit, then divide by selling price for gross margin.
CalculatorsFREE · NO SIGNUP
Retail Margin Calculator
Calculate retail gross profit, margin, and markup side by side so the two percentage bases never get mixed.
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01 USE IT NOW02 NO ACCOUNT03 FIELD NOTES BELOW
WORKING INPUTS
Compare price with merchandise cost.
LIVE RESULT
Gross margin
50.00%$30.00 merchandise gross profit. This is not net profit.GROSS PROFIT$30.00
GROSS MARGIN50.00%
IMPLIED MARKUP100.00%
SELLING PRICE$60.00
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TWO PERCENTAGES, TWO BASES
Keep margin and markup in their proper places.
Gross margin compares gross profit with selling price. Markup compares the same dollars with cost. Seeing both prevents a common pricing mistake.
WORKING VIEW
50% MARGIN$60 PRICE · $30 COST
METHOD(selling price − unit cost) ÷ selling price
WORKING NOTE$30 gross profit · 100% markup on cost
INPUTS → CLEAR OUTPUT
THE FIELD NOTES
Quick answer above. Better decisions below.
Use the result now, then read the practical notes for assumptions, examples, limitations, and the choices behind it.
$60 PRICE · $30 COST50% MARGIN
$30 gross profit · 100% markup on cost
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Retail margin versus markup
A 100% markup on a $30 cost creates a $60 price, but that price contains a 50% gross margin.
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Use gross margin in the full price decision
Merchandise gross profit must still cover marketplace fees, fulfillment, returns, advertising, overhead, taxes, and profit.
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What this calculation excludes
This is not net profit and does not infer taxes, discounts, fees, or operating expenses.
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Retail margin calculator formula
Subtract unit cost from selling price to get merchandise gross profit, then divide by selling price for gross margin.
Divide the same gross-profit dollars by unit cost for markup; the denominator is what makes the percentages different.
Retail margin versus markup
A 100% markup on a $30 cost creates a $60 price, but that price contains a 50% gross margin.
Never substitute one percentage for the other in a pricing rule.
Use gross margin in the full price decision
Merchandise gross profit must still cover marketplace fees, fulfillment, returns, advertising, overhead, taxes, and profit.
Use companion contribution and profit tools when those costs belong in the question.
What this calculation excludes
This is not net profit and does not infer taxes, discounts, fees, or operating expenses.
Keep cost and price in the same currency and unit scope.
Questions, answered.
How do I calculate retail margin?
Subtract unit cost from selling price, divide by selling price, and multiply by 100.
Is margin the same as markup?
No. Margin divides gross profit by selling price; markup divides gross profit by cost.
Is gross margin net profit?
No. Gross margin excludes operating costs, marketplace fees, taxes, financing, and other expenses.
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