Profit Margin Calculator
Find out what % of the selling price is actually profit in your pocket.
The mistake of those who sell products
One of the biggest mistakes of beginner entrepreneurs is confusing Profit Margin with Markup. If you buy a t-shirt for R$ 50 and sell it for R$ 100, your profit marginit's not 100%. Your profit margin was 50%!
The Mathematics of Profit
A Profit MarginAlways look at the final sale price as being 100% of the operation (the whole pizza). Then, you cut the slice that was used to pay for the product cost. What is left of the pizza is your profit margin. In the t-shirt example: You sold it for 100 (whole pizza). You took 50 to pay the supplier (half of the pizza). The profit of 50 represents the other half of the pizza, that is, 50% Margin.
Having clarity about this metric is vital to approve sales commissions and discounts. If you have a 20% margin and give a 20% discount on Black Friday, you have wiped out your profit and sold for free.