Gross Margin Calculator
Calculate gross profit, gross margin percentage, and markup from revenue and cost of goods sold (COGS).
Results
What is it?
Gross Margin is the percentage of revenue remaining after subtracting the cost of goods sold (COGS). It tells you how efficiently a business converts sales into profit before operating expenses. Markup, by contrast, is calculated on cost — not on revenue — and is always higher than the equivalent gross margin percentage.
How to use
1. Enter your total revenue (net sales). 2. Enter your COGS — the direct costs of producing or purchasing the goods sold. The calculator shows your gross profit in dollars, gross margin as a % of revenue, and markup as a % of cost.
Example scenario
A retailer sells $10,000 worth of clothing with $6,000 in COGS. Gross profit is $4,000. Gross margin = $4,000 / $10,000 = 40%. Markup = $4,000 / $6,000 = 66.7%. These are two different ways to express the same profitability.
Pro tip
Gross margin benchmarks vary widely: grocery retail ~25%, fashion retail ~50%, software/SaaS 70–90%. If your margin is below your industry average, focus on raising prices, negotiating supplier costs, or shifting to higher-margin products. Never confuse margin with markup — a 50% markup only yields a 33.3% gross margin.