Profit Margin, Markup & Break-Even Calculator
Verify unit profit, compare gross profit margin vs. cost markup percentages, and find your exact monthly break-even sales volume with instant PDF export.
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Gross Profit Margin vs. Markup: Key Differences & Formulas
Confusing profit margin with markup is one of the most common pricing mistakes in retail, manufacturing, and e-commerce:
- Gross Profit Margin (%): Profit divided by the Selling Price × 100. Margin tells you what percentage of every revenue pound/dollar is profit (always under 100%).
- Markup (%): Profit divided by the Cost Price × 100. A 50% markup on a £40 item gives a £60 selling price, which equals a 33.33% gross margin.
- Break-Even Units: Monthly Fixed Costs divided by Gross Profit per Unit.
Frequently Asked Questions
What is the difference between a 50% markup and a 50% profit margin?
A 50% markup adds half of the cost price on top of cost (e.g., £100 cost becomes £150 price, yielding a 33.33% margin). A 50% profit margin means half of the final selling price is profit (e.g., £100 cost must be sold at £200).
How does the break-even calculation work?
Enter your monthly fixed overheads (rent, salaries, software) alongside your unit cost and selling price to see the exact number of units you must sell each month to cover all costs.
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