Our product margin calculator is a useful tool when it comes to calculating the gross margin of your product. Simply type in your cost price and your selling price and our calculator will do it all for you.
What is a typically good product margin?
Generally, 20% is considered a healthy product margin. However, aiming for 30% or higher will give you more scope on improving your offering as a company.
How can I improve my product margin?
You can improve your product margin in several ways. The most obvious is by increasing your cost, the other is by upselling other products or add-ons that are low cost for you. For example, if someone you sold a car wash service for an outside clean for $50, you could upsell small services like tyre shine, interior cleaning, or even a small add on like a car freshener to add a healthier overall margin to your original product or service.
How much margin should I add to my product?
Margin will heavily depend on the niche and industry of your business. Generally, speaking we recommend aiming for 30% or more but for certain niches margins can be as high as 85%. If you are in the low margins such as 10%, you should review on how you could improve that as it having such low margins may put your business in danger.
Which is more important profit or profit margin?
While it may seem a basic business question, profit is typically more important for scaling businesses due to the cashflow availability that profit allows. However, companies that look to avoid financial downturns should also focus on profit margins. Profit margins also allow for the maintenance of brand value. To be conclusive, both are important.
Can I download the product margin calculator?
At the moment we don’t allow for the download option. It is only accessible via this page on Desktop and Mobile devices.
Margin versus Markup Explained
Markup is a lot like added money that you paid for an item. For example, if you bought a pen for 5 dollars and you decide to add 3 dollars to its price, that’s a 3 dollar markup. You’re now selling the pen for 8 dollars.
Margin is how much of the final price is your profit. So, if you sell the pen for 8 dollars, you’ll get 3 dollars as your profit. Typically, we display margin as a percentage which would be 37.5%. Margin is calculated by dividing profit by selling price, times a 100.
