Product Margin Calculator For Online Stores

What Is a Product Margin?

Product margin is the percentage of revenue that remains as profit after subtracting the product cost. It shows how efficiently a product generates profit. A higher margin means you earn more profit from each sale, while a lower margin signals pricing or cost issues.

What Does a Product Margin Calculator Do?

A product margin calculator measures the profitability of a product by comparing its cost with the selling price. It calculates profit margin as a percentage, making it easy to evaluate pricing performance, compare products, and plan revenue targets.

How to Calculate Product Margin?

First, identify the total cost of the product. This should include the purchase price, manufacturing cost, and any direct expenses related to selling the product.

Next, note the selling price or revenue earned from the product. This is the amount customers pay before taxes or optional discounts.

Then, subtract the product cost from the selling price. The result is the profit made on that product.

After that, divide the profit by the selling price. This shows how much of the revenue is profit.

Finally, multiply the result by 100 to get the product margin percentage. This percentage helps you compare profitability across products.