Profit Margin Calculator

Calculate your gross profit margin from revenue and cost, or find the right selling price using markup percentage.

Revenue & Cost

Total Revenue

₦

Total Cost (COGS)

₦

Gross Profit Margin

30.0%

Gross Profit

₦300,000

Revenue

₦1,000,000

Cost of Goods

₦700,000

How to Use This Calculator

From Revenue Tab

Enter your total revenue and total cost of goods sold (COGS) to instantly see your gross profit and profit margin percentage. Use this to evaluate the profitability of your business or a specific product line.

From Markup Tab

Enter your cost price and the markup percentage you want to apply. The calculator shows the resulting selling price, profit per unit, and — importantly — the actual profit margin percentage, which is always lower than the markup %.

Markup vs Margin — Key Difference

Profit Margin = (Selling Price − Cost) ÷ Selling Price × 100 Markup % = (Selling Price − Cost) ÷ Cost × 100 Example: Cost = ₦5,000, Markup = 40% → Selling Price = ₦7,000 → Profit = ₦2,000 → Margin = 2,000 ÷ 7,000 × 100 = 28.6% → Markup = 2,000 ÷ 5,000 × 100 = 40%

Many Nigerian business owners confuse markup and margin. A 40% markup gives only a 28.6% margin. When comparing with industry benchmarks (which use margin), use the margin figure — not markup.

Example

Lagos Electronics Retailer

Monthly Revenue₦3,000,000

Cost of Goods Sold₦2,100,000

Gross Profit₦900,000

Gross Profit Margin30%

This 30% margin is typical for electronics retail in Nigeria. Fast-moving consumer goods (FMCG) typically run 15–25%, while services can achieve 50–70% gross margins.

FAQ

It depends heavily on the industry. Retail groceries: 5–15%. Electronics: 15–30%. Fashion/clothing: 40–60%. Restaurants: 25–40% gross (but 3–9% net after overheads). Professional services (consulting, legal): 50–70%. Software/digital products: 60–80%. Always compare against your industry benchmark, not a single "good" number.

Gross margin only deducts the direct cost of producing goods (COGS) from revenue. Net margin deducts all costs — COGS plus operating expenses like rent, salaries, utilities, marketing, taxes, and loan interest. A business might have a 40% gross margin but only 8% net margin after paying all its overhead. Both numbers matter for a complete picture.

Key strategies: (1) Increase prices — even 5–10% can dramatically improve margins if demand is relatively inelastic. (2) Reduce COGS — buy in bulk, negotiate with suppliers, reduce waste. (3) Add higher-margin products to your mix. (4) Reduce overheads — consolidate generator usage, renegotiate rent, automate manual processes. (5) Focus on your most profitable customer segments and product lines.