Gross Margin Calculator
Enter your cost and selling price to instantly calculate gross margin, gross profit, and markup percentage.
How to Calculate Gross Margin
Gross margin measures the percentage of revenue that exceeds the cost of goods sold (COGS). It tells you how much of every dollar in sales is available to cover operating expenses and profit.
Formula
Gross Margin (%) = ((Revenue − Cost) / Revenue) × 100
Gross Margin vs. Markup
These are often confused but they measure different things. Margin is the percentage of the selling price that is profit. Markup is the percentage added to the cost to arrive at the selling price.
Markup formula
Markup (%) = ((Revenue − Cost) / Cost) × 100
Example
If you buy a product for $75 and sell it for $100:
- Gross Profit = $100 − $75 = $25
- Gross Margin = ($25 / $100) × 100 = 25%
- Markup = ($25 / $75) × 100 = 33.33%
What is a Good Gross Margin?
It depends on the industry. For wholesale distribution, gross margins typically range from 15% to 35%. For retail, 40% to 60% is common. The key is to track your margins over time and by product category to spot trends and pricing issues early.
Why Gross Margin Matters for Warehouse Operations
For distributors and wholesalers, gross margin is the single most important profitability metric. It directly impacts how much you can invest in warehouse operations, staffing, and technology. Tracking margin at the SKU level — not just in aggregate — helps you identify which products are actually making money after accounting for handling, storage, and shipping costs.
Track margins automatically
Loumia calculates gross margin per SKU, per customer, and per order in real time — with perpetual inventory costing built in. No spreadsheets.
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