Customer Margin Calculator

How to Use the Calculator

1. Enter the Selling Price of your product in the first input field (the price you sell the product for).
2. Enter the Cost Price of your product in the second input field (the price you paid for the product).
3. Click the Calculate button to calculate the gross margin percentage.
4. The result will be displayed as a percentage in the Gross Margin Percentage field.
5. If you want to start over, click the Reset button to clear all input fields.

Understanding Gross Margin Percentage

The Gross Margin Percentage is a financial metric that shows the percentage of revenue that exceeds the cost of goods sold (COGS). It indicates how much of each dollar of sales is profit after accounting for the cost of the product.

The formula used in this calculator is:

Margin (%) = (Selling Price - Cost Price) / Selling Price × 100%

For example, if you sell a product for $50 (selling price) that cost you $30 (cost price), your gross margin percentage would be:

Margin (%) = ($50 - $30) / $50 × 100% = 40%

Practical Applications

• Setting product prices to ensure profitability
• Evaluating the profitability of different products
• Tracking changes in profitability over time
• Comparing your margins with industry benchmarks

Note: This calculator calculates the gross margin percentage, which does not include other expenses such as operating costs, taxes, and marketing expenses.