Determine your product's price with the Profit Margin Calculator by PageFly to make every penny count.
The profit margin is a ratio of your company's profit (sales minus all expenses) divided by its revenue.
It's important to gauge your profit margin to make sure your company is earning enough money to reinvest in itself.
Profits can be utilized for business expansion strategies such as marketing, advertising, acquiring new equipment, purchasing necessary software, etc.
This margin compares revenue to variable costs. It reveals the amount of profit each product generates excluding fixed costs.
You can calculate with this formula:
Cost per item: The full cost of making or purchasing a good. This covers variable expenses, labor costs, and material costs.
Markup: refers to the difference between the selling price of a good or service and its cost. It is expressed as a percentage above the cost.
Selling price: the price that your customers pay to buy your product or goods.
Profit margin is vary, depending on the industry but a healthy ratio is around 50% to 70%. If you are in clothing, due to the immense competition this percentage can be way lower, around 14%.Calculate Your Profit Now
Raise the selling price: Raising prices is an obvious solution, but it’s not always the best strategy, especially in a low-margin business or competitive industries, like retail sales, food service or warehousing.
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