How to use the Profit Calculator
- Enter the cost price and selling price per unit (both excluding GST, if you are registered).
- Enter the number of units sold.
- Add any other expenses for this batch that are not already in the cost price.
Formula
Revenue = Selling price × Units
Net profit = Revenue − (Cost price × Units) − Other expenses
Net margin % = Net profit ÷ Revenue × 100
Break-even price = (Cost price × Units + Other expenses) ÷ Units
Gross profit vs net profit
Gross profit is revenue minus the cost of the goods sold. Net profit also subtracts the other expenses of making those sales — delivery charges, packaging, platform commission, payment gateway fees and advertising. Many sellers look only at gross profit and are surprised when the bank balance doesn't match.
Why the break-even price matters
The break-even price is the lowest selling price at which you don't lose money on this batch. Any discount or price cut below it turns the sale into a loss. For fixed business costs like rent and salaries, see the Break-even Calculator.
Worked example
100 units bought at ₹400 and sold at ₹550, with ₹3,000 shipping and fees
- Revenue = 550 × 100 = ₹55,000
- Cost of goods = 400 × 100 = ₹40,000 → gross profit ₹15,000
- Net profit = 15,000 − 3,000 = ₹12,000
- Net margin = 12,000 ÷ 55,000 = 21.82%
- Break-even price = (40,000 + 3,000) ÷ 100 = ₹430
Net profit ₹12,000 (21.82% margin); do not sell below ₹430
Important notes
- If you are GST-registered, use prices excluding GST. The GST you collect is not your income.
- Return-on-cost is shown for reference; it equals markup when there are no other expenses.
Frequently asked questions
How do I calculate profit percentage?
Profit percentage is usually calculated on cost: profit ÷ cost × 100. Buying at ₹400 and selling at ₹500 is a 25% profit on cost. As a margin on the selling price, the same sale is 20%.
What counts as 'other expenses'?
Anything you spend to make these specific sales that isn't in the purchase cost: courier charges, packaging, marketplace commission, payment gateway fees, and ad spend for the product.