Profit Margin Calculation
Profit margin is the ratio of the amount left after subtracting cost from the sale price to the sale price. When you enter the sale price and cost, this tool shows the profit amount and margin percentage.
Calculating…
Calculation formula
Profit margin (%) = (Profit ÷ Sale price) × 100
How to interpret it?
Profit margin and markup are often confused. Margin is the ratio of profit to the sale price ; markup is the ratio of profit to cost For a 600 TL product sold at 1,000 TL, margin is 40% and markup is 66.7%. Confusing the two figures leads to serious pricing errors.
On a marketplace, remember that this calculation alone is not enough: if the cost here is only the product cost, commission, shipping, returns and advertising have not yet been deducted. For real net profit, you need to add these items to the cost as well.
Limitations: what does this tool not calculate?
It only considers the cost you enter. If you have not added commission, shipping, returns and advertising costs, the result will be higher than your real net profit.
Tax is not included. VAT and other taxes are not included in this calculation.
For a single product only. For store-wide profitability, product-level calculations need to be aggregated.
Frequently asked questions
How is profit margin calculated?
Cost is subtracted from the sale price, the remaining amount is divided by the sale price, and multiplied by 100.
What is the difference between profit margin and markup?
Margin is the ratio of profit to sale price; markup is the ratio of profit to cost. For a 600 TL cost sold at 1,000 TL, margin is 40% and markup is 66.7%.
Does this tool account for commission?
No. You need to add items like commission, shipping and advertising to the cost field yourself.
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Last updated: September 10, 2026