Profit Margin Calculator

Profit margin is the percentage of revenue that becomes profit after deducting cost. It is the single most important pricing metric for any retail or wholesale business — it tells you how much of every riyal you collect is actually yours.

Margin is NOT markup

Margin and markup describe the same profit from two different angles. Margin is profit divided by the selling price; markup is profit divided by cost. The same product can have a 50% markup but only a 33.33% margin — and confusing the two is one of the most common pricing mistakes shop owners make.

Margin % = (Price − Cost) / Price × 100 | Markup % = (Price − Cost) / Cost × 100

Three calculation modes

• Find margin: enter cost and price, get the margin and markup percentages.
• Find price: enter cost and your target margin, get the exact price to charge.
• Find cost: enter price and target margin, get the maximum cost you can pay for the item.

Worked example

1. Cost per unit: 80 SAR
2. Selling price: 100 SAR
3. Profit per unit: 100 − 80 = 20 SAR
4. Margin: 20 / 100 × 100 = 20%
5. Markup: 20 / 80 × 100 = 25%

Practical pricing tips

• Decide your target margin before you set the price — not after.
• Account for VAT, shipping, and payment-gateway fees in your cost figure.
• A 100% margin is mathematically impossible (price would be infinite); aim realistically.
• Compare margins across SKUs to spot under-priced products.