What is gross profit?

Gross profit is revenue minus cost of goods sold (COGS). It shows how much money is left to cover operating expenses and generate net income after accounting for direct production or purchase costs.

What is the difference between gross margin and markup?

Gross margin % is gross profit divided by revenue (profit as a share of selling price). Markup % is gross profit divided by COGS (profit as a share of cost). A 50% markup equals a 33.3% gross margin.

What is a good gross margin?

It varies by industry. Software and SaaS companies often reach 70–80%. Physical goods retailers typically aim for 30–50%. Grocery and commodity businesses may run 10–25%. Compare your margin to industry benchmarks rather than a universal target.

What does COGS include?

COGS (Cost of Goods Sold) includes direct costs: raw materials, manufacturing labor, packaging, and direct freight in. It excludes indirect costs like marketing, rent, and salaries of non-production staff — those are operating expenses below the gross profit line.

How do I find required revenue for a target margin?

Use the reverse mode: enter your COGS and target gross margin %. The calculator derives the required selling price using Revenue = COGS / (1 − Margin%).

Gross Profit Calculator

Name: Gross Profit Calculator
Availability: InStock
Author: Nham Vu

Enter your revenue and cost of goods sold to instantly calculate gross profit, gross margin %, and markup %.

Enter Your Numbers

Revenue (Net Sales)

Cost of Goods Sold (COGS)

Results

Enter values on the left to see results.

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Summary

Enter your revenue and cost of goods sold to instantly calculate gross profit, gross margin %, and markup %.

How it works

Gross Profit = Revenue − COGS
Gross Margin % = (Gross Profit / Revenue) × 100
Markup % = (Gross Profit / COGS) × 100
Reverse: Revenue = COGS / (1 − Target Margin %)

Use cases

Check whether a product is priced profitably before launch.
Compare margin across SKUs or product categories.
Set wholesale prices that protect your target margin.
Verify COGS data from accounting reports matches expected margins.
Quickly convert between margin % and markup % without a spreadsheet.
Prepare profitability summaries for investor or board decks.

Frequently Asked Questions

Last updated: 2026-07-01 · Reviewed by Nham Vu