Gross Profit Calculator
Calculate gross profit, gross margin and markup from your cost and selling prices in seconds.
Results
How Gross Profit Is Calculated
- Gross Profit = Selling Price − Cost Price.
- Gross Margin shows the percentage of the selling price that is profit.
- Markup shows the percentage added to the cost price.
- Enter values in pounds or any other currency. The calculator uses the same currency throughout.
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How to Calculate Gross Profit
Enter your cost price and selling price to instantly calculate gross profit, gross margin percentage and markup percentage. This calculator helps businesses understand product profitability and make better pricing decisions.
Overview
The Gross Profit Calculator is designed for retailers, wholesalers, manufacturers, eCommerce sellers and business owners who need to understand how profitable their products and services are. Gross profit is one of the most important financial metrics because it measures the money remaining after the direct cost of providing a product or service has been deducted. The calculator also determines gross margin and markup percentages, allowing you to compare pricing strategies, optimise profits and monitor business performance. Whether you sell on Amazon, eBay, Shopify, Etsy or through a physical shop, understanding these figures is essential for long-term success.
Benefits
How It Works
Enter your cost price.
Enter your selling price.
The calculator subtracts the cost price from the selling price to determine gross profit.
Gross margin is calculated as a percentage of the selling price.
Markup is calculated as a percentage of the cost price.
All three values are displayed instantly.
How to Use This Tool
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1Enter the cost price.
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2Enter the selling price.
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3Review your gross profit.
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4Review the gross margin percentage.
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5Review the markup percentage.
Helpful Tips
- Always use the same currency for both prices.
- Selling price should normally be higher than the cost price.
- Gross margin and markup are different financial measurements.
- Review pricing regularly as supplier costs change.
- Include packaging and shipping costs when calculating cost price.
- Monitor your margins across different products.
- Small changes in selling price can significantly affect profitability.
- Compare products to identify your most profitable lines.
Common Uses
Retail pricing.
Wholesale pricing.
Amazon sellers.
eBay sellers.
Shopify stores.
Manufacturing.
Business pricing reviews.
Profitability analysis.
Worked Examples
The following examples demonstrate how this tool can be used in realistic scenarios.
Retail product
Calculate the gross profit, margin and markup for a product that costs £20 and sells for £35.
Amazon seller
Estimate profitability before listing a new product online.
Wholesale pricing
Compare several selling prices to determine the best balance between competitiveness and profitability.
Restaurant menu pricing
Calculate the profitability of menu items using ingredient costs and selling prices.
Common Mistakes
Avoid these common mistakes to achieve the most accurate results.
- Confusing markup with gross margin.
- Leaving out packaging or shipping costs.
- Ignoring supplier price increases.
- Using different currencies for cost and selling price.
- Assuming higher sales always produce higher profits.
- Forgetting to review pricing regularly.
- Ignoring discounts when analysing profitability.
- Using gross profit instead of net profit when evaluating business performance.
Glossary
Definitions of the most important terms used by this tool.
Gross Profit
The difference between the selling price and the direct cost of providing a product or service.
Gross Margin
Gross profit expressed as a percentage of the selling price.
Markup
Gross profit expressed as a percentage of the cost price.
Cost Price
The amount paid to produce or purchase a product before it is sold.
Selling Price
The amount charged to customers for a product or service.
Revenue
The total income generated from sales before expenses are deducted.
Profitability
A measure of how much profit a business earns from its sales.
Direct Costs
Costs directly associated with producing or purchasing a product.
Frequently Asked Questions
What is gross profit?
Gross profit is the difference between the selling price and the direct cost of the product or service.
What is the difference between gross margin and markup?
Gross margin is calculated using the selling price, while markup is calculated using the cost price. Although related, they produce different percentages.
Can I use this calculator for services as well as products?
Yes. Any business with a cost and a selling price can use this calculator.
Does the calculator support all currencies?
Yes. The calculations work with any currency provided both values use the same currency.
Does this include VAT or sales tax?
No. VAT, sales tax and operating expenses are not included in these calculations.
Why is my gross margin lower than my markup?
Gross margin is calculated from the selling price while markup is calculated from the cost price, so the percentages are naturally different.
Can I use this calculator for online marketplaces such as Amazon or eBay?
Yes. It is ideal for evaluating product profitability before listing products online.
Can businesses use this calculator when setting prices?
Yes. It is commonly used when reviewing pricing strategies and forecasting profitability.
Things to Know
- Results are estimates based on the values entered.
- VAT, sales tax and operating expenses are not included.
- Use the same currency for all values.
- Review profitability regularly as costs change.
- Gross profit is different from net profit.
Disclaimer
This calculator is intended for budgeting, pricing and financial planning purposes only.
Actual business profitability depends on additional operating expenses and taxation.
SwiftVecto accepts no responsibility for business decisions based solely on these calculated estimates.
Official References
The following official resources were used when developing this tool and are useful for further reading.