Gross Margin & Markup Calculator
Gross margin = (price − cost) ÷ price
Enter your price and unit cost for margin and markup.
TL;DR Gross margin = (price − cost) ÷ price A $40 price on a $15 unit cost is $25 gross profit, a 62.5% gross margin and a 166.7% markup. Margin and markup are not the same: margin is measured against price, markup against cost. Many consumer-brand products run 40–65% gross margin at wholesale, and higher direct-to-consumer, as of Q3 2026.
Gross profit
$25
Gross margin
62.5%
Markup
166.7%
The formula
Gross margin = (price − cost) ÷ price × 100 · Markup = (price − cost) ÷ cost × 100
Worked example
A product sells for $40 with a $15 unit cost. Gross profit = $40 − $15 = $25. Gross margin = $25 ÷ $40 = 62.5%. Markup = $25 ÷ $15 = 166.7%. To price for that same 62.5% margin from the $15 cost: $15 ÷ (1 − 0.625) = $40.
Typical gross margins by channel (indicative, as of Q3 2026)
| Channel | Typical gross margin |
|---|---|
| Mass / grocery wholesale | 25% – 45% |
| Specialty / natural wholesale | 40% – 60% |
| Direct-to-consumer | 55% – 75% |
Ranges are indicative national figures for stabilized assets and vary by market, brand, and condition. For preliminary planning only; not an offer of credit.
Frequently asked questions
What is the difference between margin and markup?
Margin and markup are not the same. Gross margin is gross profit as a percentage of the selling price ((price − cost) ÷ price), while markup is gross profit as a percentage of the cost ((price − cost) ÷ cost). A $40 price on a $15 cost is a 62.5% margin but a 166.7% markup, because the same $25 of profit is measured against a larger base (price) for margin and a smaller base (cost) for markup.
How do you calculate gross margin?
Gross margin = (price − cost) ÷ price × 100. A product that sells for $40 with a $15 unit cost earns $25 of gross profit, and $25 ÷ $40 = 62.5% gross margin.
What is a good gross margin for a consumer brand?
As of Q3 2026, many consumer-brand products run roughly 40% to 65% gross margin at wholesale and higher direct-to-consumer, where there is no retailer or distributor taking a cut. The right target depends on channel mix, category, and how much you spend on marketing and fulfillment.
How do I price for a target margin?
Price = cost ÷ (1 − target margin). To hit a 62.5% gross margin on a $15 unit cost: $15 ÷ (1 − 0.625) = $15 ÷ 0.375 = $40. Divide by one minus the decimal margin, not by the margin itself.