Free Profit Margin Calculator (India)
Calculate the perfect selling price, gross margin, and markup percentage instantly.
Calculation uses Gross Margin formula (Profit / Revenue). Example: To get a 20% margin on a ₹100 item, the price must be ₹125.
Margin vs. Markup: What is the Difference?
One of the biggest mistakes Indian SMB owners make is confusing Gross Margin with Markup. While they use the same inputs (Cost and Profit), they tell you two very different things about your business.
What is Margin?
Margin is the percentage of the Final Selling Price that is profit. If you sell a product for ₹100 and earn ₹20, your margin is 20%.
Formula: (Selling Price - Cost) / Selling Price
What is Markup?
Markup is the percentage added to the Cost Price to get the selling price. If you buy for ₹80 and add ₹20, your markup is 25%.
Formula: (Selling Price - Cost) / Cost
Why use this calculator?
This tool specifically calculates the Selling Price based on Gross Margin. This is the industry standard for retail because it ensures that when you give a discount (e.g., 10% off), you are discounting from a price that already accounts for your profit ratio.
How to Calculate Selling Price?
To set the right price for your inventory, follow these steps:
- Enter Cost Price: The total amount you paid to acquire the product (including shipping and GST).
- Decide Desired Margin: A typical healthy retail margin is between 20% to 50% depending on the industry.
- Get Results: The tool automatically divides your cost by (1 – Margin Percentage) to give you the exact price tag value.
Frequently Asked Questions (FAQs)
What is a good profit margin for retail in India?
While it varies by industry, a gross profit margin of 20% to 30% is considered healthy for general retail. Fashion and luxury goods often require margins upwards of 50% to cover higher overheads.
Is 50% Markup the same as 50% Margin?
No. A 50% markup on a ₹100 item makes the price ₹150. However, the margin on that sale is only 33.3%. To achieve a 50% margin, you would need a 100% markup (selling at ₹200).
How do I automate pricing for my shop?
Manual calculation is fine for a few items. For a full inventory, consider using SaaS tools like Inventra which automatically calculates margins and suggests selling prices.
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