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.
Common questions
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.