Calculate Margin

Use the Calculate Margin tool to gain insight into the profitability of a product, service or business. Margin shows what portion of your revenue is actually profit after costs have been deducted.

For entrepreneurs, margin is often a more important metric than profit alone, as it directly shows how efficiently revenue is converted into profit.

What is margin?

Margin is the difference between revenue and costs, expressed as both an amount and a percentage.

Formulas:

• Gross profit = Revenue − Costs
• Margin (%) = (Gross profit ÷ Revenue) × 100

Why margin is important

A healthy margin:

• creates room for growth
• provides insight into pricing strategies
• helps control costs
• prevents losses when scaling up

Margin is essential, especially for online stores and product sales.

Margin versus profit

Profit is an absolute amount.
Margin is a relative percentage.

A low margin with high revenue can be riskier than a higher margin with lower revenue.

Examples

• Revenue: €100
• Costs: €70
• Gross profit: €30
• Margin: 30%

Who is this tool for?

• freelancers
• online stores
• retailers
• service providers
• new entrepreneurs

Frequently asked questions

Does this include VAT?
No, it excludes VAT by default.

Can I use this for each product?
Yes, it is ideal for individual products.

What is a good margin?
This varies by industry, but it is often between 20% and 60%.