Work out gross profit, profit per unit, gross margin and markup from your selling price, unit cost and units sold — or straight from revenue and COGS.
Price and cost for one unit, and how many you sold. A discount is optional.
This is a gross profit calculation only: it stops at the cost of goods sold and does not account for operating expenses, interest or tax. It is for planning and comparison, not accounting or tax advice.
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Gross profit is what is left after the direct cost of whatever you sold. Enter a selling price, a unit cost and the number of units, and this calculator returns the gross profit in dollars, the profit on each unit, the gross margin percentage and the markup — or work from the other end and enter revenue and COGS straight off the P&L. If you are discounting, it also shows what the discount gave away: the revenue forgone and the margin points it cost, which is the number that decides whether the promotion was worth running.
Gross profit is revenue minus the cost of goods sold. COGS is the cost that varies directly with each sale — materials, purchased inventory, inbound freight, and the labour used to make or deliver the product. It stops short of overhead: rent, admin salaries, marketing, insurance and interest are all paid out of gross profit, not counted within it. Gross profit is therefore a dollar figure, while gross margin is that same figure as a percentage of revenue, and markup is it as a percentage of cost. All three describe one transaction from three angles, and mixing them up is the most common pricing mistake there is.
Gross profit formula
Try a price against your unit cost and see the profit, margin and markup before you publish it.
Enter the discount and read the revenue given up and the margin points lost, then judge whether the extra volume covers them.
Run each one and compare profit per unit rather than price — the cheaper item is often the more profitable one.
Large orders come with lower prices. Work out whether the unit economics still hold at the quoted price.
Enter revenue and COGS from the accounts and get the margin and markup that sit behind the headline numbers.
Rent, payroll, software, advertising and tax are all funded from gross profit. If it does not cover them, no amount of revenue growth will.
Two products with the same price can have very different unit profits. The one with the higher figure is the one worth promoting, restocking and putting in front of customers.
A 15% discount does not cost 15% of profit — it costs far more, because the whole reduction comes out of the margin. This calculator shows exactly how much.
A strong gross profit with a weak bottom line points at overhead. A weak gross profit points at pricing or sourcing. They call for entirely different responses.
Break-even volume is fixed costs divided by gross profit per unit, so the per-unit figure here is the input to every capacity and pricing decision that follows.
Subtract the cost of goods sold from revenue. On a per-unit basis it is (selling price − unit cost) × units sold. A $33 item costing $25 sold 45 times gives $8 per unit and $360 of gross profit.
Gross profit is a dollar amount; gross margin is that amount as a percentage of revenue. $360 of gross profit on $1,485 of revenue is a 24.24% gross margin. Profit tells you how much; margin tells you how efficiently.
Both describe the same profit against different bases. Margin divides profit by the selling price; markup divides it by cost. The $33 item above carries a 24.24% margin and a 32% markup. They are never equal, and margin is always the smaller of the two.
The dollar figure alone cannot answer that — it depends entirely on your cost base and your overhead. The margin percentage is the comparable number, and it only means something within an industry. Our gross margin calculator compares yours against published figures for 28 sectors.
It includes direct labour — the people who make or deliver the product — and excludes everyone else. A bakery counts the bakers in COGS and the bookkeeper below the line. Where exactly you draw that boundary should stay consistent, because moving it changes the margin without changing the business.
Far more than it looks. Discounting a $25 item from $33 by 15% cuts the price by $4.95, but that $4.95 comes entirely out of the $8 of profit — a 62% cut in profit for a 15% cut in price. This calculator shows the revenue given up and the margin points lost so the trade is explicit.
Yes, when COGS exceeds revenue. It means each sale costs more to fulfil than it earns, so selling more makes the loss larger. It usually points to underpricing, a cost increase that was never passed on, or clearing stock below cost.
Undefined. Markup is profit expressed as a percentage of cost, and there is no meaningful percentage of zero — the answer is not 0%, which would contradict a 100% margin sitting beside it. This calculator shows a dash instead.
Per unit when you are pricing a product or comparing two items, because it gives profit per unit and lets you test a discount. Totals when you are reading a P&L for a whole period and there is no single unit to speak of.
No. Gross profit stops at the cost of goods sold. Net profit is what survives after operating expenses, interest and tax as well. A business can post a healthy gross profit and still lose money overall, which is a sign that overhead, not pricing, is the problem.