Gross Profit Calculator
Calculate your business profit in seconds with our calculator.
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What is Gross Profit and Why It Matters for Your Business
Gross profit is a fundamental financial metric that shows how much money your business makes. It is calculated by subtracting the cost of goods sold (COGS) from your shop.
How to Use This Gross Profit Calculator
Our Gross Profit Calculator makes it easy to calculate your business’s profit.
- Total Revenue: Enter your total sales amount.
- Cost of Goods Sold (COGS): Enter the cost of goods sold.
- Instant Results: Click the calculator Gross Profit button and see instant results
Understanding Your Gross Profit Margin
The gross profit margin (as a percentage) shows what portion of each dollar of revenue remains after accounting for COGS.
- Retail: 20-30% margin
- Software: 70-90% margin
- Manufacturing: 30-50% margin
- Restaurants: 10-15% margin
Ways to Improve Your Gross Profit
If your gross profit margin is lower than desired, consider these strategies:
- Increase prices: Carefully test price increases to maximize revenue without losing customers
- Reduce COGS: Negotiate with suppliers, find more cost-effective materials, or improve production efficiency
- Product mix: Focus on selling higher-margin products or services
- Volume discounts: Buy materials in larger quantities to reduce per-unit costs
Gross Profit vs. Net Profit
While gross profit measures profitability after direct costs, net profit accounts for all expenses including operating costs, taxes, and interest. Both metrics are important for understanding your business’s financial health at different levels.
Regularly calculating your gross profit helps you make informed decisions about pricing, cost control, and overall business strategy. Bookmark this page to track your profitability over time!