How to use this gross profit calculator
Enter the resale price — what you sell the item for — and your cost — what it cost you to buy or make it. The result updates instantly, showing your gross profit in dollars along with your gross margin and markup percentages. It works per item or for a whole batch — just keep both numbers on the same basis.
What is gross profit?
Gross profit is simply your resale price minus your cost. It's the money left over from a sale before you account for other expenses like overhead, shipping, fees, or taxes.
Margin vs. markup — don't mix them up
Both describe the same profit, but from different bases. Margin is profit as a percentage of the resale price; markup is profit as a percentage of the cost. The same $6 profit above is a 33.33% margin but a 50% markup — the same dollars measured two ways. This trips people up when pricing, so always be clear which one you mean.
What's a good gross margin?
It depends heavily on your industry. Software and digital products often run 70–90%; professional services 40–60%; retail and e-commerce 20–50%; grocery and hardware can be below 20%. The useful comparison is against other businesses in your sector, and against your own trend over time.
Gross profit vs. net profit
Gross profit is just resale minus cost — the profit on the item itself. Net profit goes further and subtracts everything else: overhead like rent and salaries, plus shipping, payment fees, and taxes. Gross profit tells you whether an item is worth selling; net profit tells you whether the whole business is making money.
Frequently asked questions
What is gross profit?
The resale price of an item minus its cost. Sell something for $18 that cost $12 and your gross profit is $6.
How do you calculate gross margin?
Gross profit ÷ resale price × 100. A $6 profit on an $18 resale is a 33.33% gross margin.
Margin vs. markup?
Margin is profit as a percentage of the resale price; markup is profit as a percentage of the cost. The same $6 is a 33.33% margin but a 50% markup.
What is a good gross margin?
It varies by industry — software is often 70–90%, retail 20–50%. Compare against your own sector rather than one universal number.
Gross profit vs. net profit?
Gross profit is resale − cost. Net profit subtracts all your other expenses too — overhead, fees, and taxes.
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This calculator is for educational and planning purposes only and provides estimates, not financial, tax, or accounting advice. See how we calculate.