Profit Calculator

Gross profit per unit = unit price − unit cost; total revenue = quantity × unit price; total cost = quantity × unit cost + fixed costs; profit = total revenue − total cost; profit margin = profit ÷ total revenue × 100; break-even quantity = fixed costs ÷ (unit price − unit cost)

Unit price

What one unit sells for, before any discount you give later. If the batch sells at several prices, use the weighted average and treat the answer as an average too — the arithmetic has no way to know that a mix went in.

Unit cost

What one unit costs you to put in front of the customer. For a reseller that is the purchase price; for a maker it is the materials and the direct labour on that unit. Rent, salaries and marketing do not belong here, which is what keeps this figure separate from the fixed costs field.

Quantity

How many units the batch contains. It multiplies both the revenue and the variable cost, so it settles whether the fixed costs get covered — the whole calculation turns on this one number being big enough.

Fixed costs

Everything you pay whether or not a single unit sells: rent, salaries, insurance, software, the licence. They do not change with the quantity, which is exactly why they are the reason a small batch can lose money while a large one of the same product is profitable.

Profit

Total revenue minus total cost, in money. It is the only figure here that tells you whether the batch is worth running at all, and it can just as easily be negative as positive.

Profit margin

Profit divided by total revenue. It answers what share of each pound, dollar or euro taken in was kept, so it is comparable across batches of different sizes in a way that the profit itself is not.

Use it when you know how much you are going to sell and want to know what that leaves — a purchase order in front of you, a trade show you have committed to, a month that has already happened. The direction matters, because this page has a twin arriving in the same batch: here the quantity is an input and the profit is the answer, while on the break-even page the quantity is the answer and the question is how much it has to be. Same four numbers, opposite direction, and the giveaway is which field you leave out. Two things to keep in mind. The fixed costs are what make this page more than a multiplication: without them the profit would simply be the unit gross profit times the quantity, and every extra unit would add the same amount forever, which is true of almost no real business. And the answer is only as good as the unit cost you entered — a figure that leaves out shipping, payment fees or a marketplace commission will flatter the batch, and the page cannot tell you that it did.

1. A 500-unit batch: buy at 60, sell at 100, 5,000 of fixed costs

   1. Revenue: 500 × 100 = 50,000
   2. Variable cost: 500 × 60 = 30,000
   3. Total cost: 30,000 + 5,000 = 35,000
   4. Profit: 50,000 − 35,000 = 15,000
   5. Profit margin: 15,000 ÷ 50,000 = 30 percent

   The unit gross profit is 40, and 500 of those is 20,000 — but only 15,000 survives once the fixed costs are paid. That 5,000 gap is the whole reason the quantity has to be an input: at 125 units the same product makes exactly nothing, and below that it loses money.

2. The same batch at 100 units — a loss, and a legitimate answer

   1. Revenue: 100 × 100 = 10,000
   2. Variable cost: 100 × 60 = 6,000
   3. Total cost: 6,000 + 5,000 = 11,000
   4. Profit: 10,000 − 11,000 = −1,000
   5. Profit margin: −1,000 ÷ 10,000 = −10 percent

   Nothing here is an error. Every unit still sold above its own cost, and the batch still lost money, because 100 units at 40 each only raises 4,000 against 5,000 of overheads. The margin goes negative with it, which is the arithmetic telling you that this price and this volume cannot both be right.

3. Odd money: 240 units at 12.50 cost and 19.99 price

   1. Revenue: 240 × 19.99 = 4,797.60
   2. Total cost: 240 × 12.50 + 0 = 3,000
   3. Profit: 4,797.60 − 3,000 = 1,797.60
   4. Profit margin: 1,797.60 ÷ 4,797.60 = 37.47 percent

   With no fixed costs the batch is a pure multiplication, and the margin is the same 37.47 percent that the margin calculator returns for a single unit at these two prices. That is worth noticing: the margin of a batch is the margin of one unit whenever every unit costs the same, and it is only the fixed costs that make volume matter.

4. Something with no cost of goods: 0 unit cost, 1,000 fixed

   1. Revenue: 400 × 25 = 10,000
   2. Total cost: 400 × 0 + 1,000 = 1,000
   3. Profit: 10,000 − 1,000 = 9,000
   4. Profit margin: 9,000 ÷ 10,000 = 90 percent

   A zero unit cost is what a digital product looks like, and it produces the highest margin the page will ever show without the input being refused — but 90 percent is a margin, not a windfall. The 1,000 of fixed costs had to be paid before the first copy sold, and it is the same 1,000 that makes the break-even quantity 40 units rather than one.

This is gross profit in the sense that matters for a batch, not the profit a business finally keeps. Tax, interest on any borrowing, and the costs of running the company that were not entered as fixed costs all come out afterwards, so a batch showing a comfortable profit can still be part of a year that loses money. Every unit is treated as costing the same and selling for the same price, which is never quite true once discounts, returns, breakage and shipping enter: a batch with a mix of products needs a weighted average unit cost, and averaging is itself a simplification that hides the items losing money. The quantities are also taken as certain — the calculator answers what a given quantity earns, not what quantity you will actually sell, and nothing on the page will tell you whether the sales will show up. Finally, the profit is a fact about a price you have already chosen; it says nothing about whether a different price would have earned more, because it does not model how demand responds to price.

Why does the quantity matter if the margin stays the same?

Because of the fixed costs. The margin on a unit does not change with volume — 100 sold at 100 and costing 60 is a 40 percent margin whether you sell one or a thousand — but the fixed costs are paid once regardless, so they are spread thinner as the quantity rises. Sell 100 units and the fixed cost per unit is 50, which is more than the gross profit and turns the batch into a loss; sell 500 and it is 10, which leaves 30 percent. That is the entire content of the break-even point, and it is why a profitable product can still be a losing batch.

Is the profit margin the same as the gross margin on one unit?

Not once fixed costs are in the picture. Divide the profit by the revenue of the batch and the fixed costs are inside the numerator, so the figure is lower than the unit margin whenever the fixed costs are more than nothing. With 500 units at 100 costing 60 and 5,000 of fixed costs, the unit margin is 40 percent and this page prints 30. If you want the margin of a single sale on its own, the margin calculator gives it; if you want to know what the batch earns, this is the number, and the difference between them is exactly the overhead.

What is the difference between this page and the break-even calculator?

The direction. Here you tell it how many units you are selling and it tells you the money that leaves; there you tell it the costs and the price and it tells you how many units are needed before anything is left at all. The four numbers are the same and the arithmetic is one rearrangement, so if you have used one page you already understand the other. The practical difference is which one you can answer: a batch you have already committed to is a profit question, a price you are still setting is a break-even question.

Should tax be entered as a fixed cost?

No, if you mean income tax on the profit — that is charged on the answer this page produces, so putting it in the fixed costs field would have it deducted before it is calculated, and the result would be a figure that is neither the profit before tax nor the profit after it. Property tax, business licences and other charges you pay whether or not you sell anything are a different matter and do belong in fixed costs. Sales tax collected from customers is not part of the price at all, so keep it out of both fields.

What if the units do not all cost the same?

Enter a weighted average and read the answer as an average. If 300 units cost you 55 and 200 cost you 68, the weighted average is 60.20 and that is the honest figure to use for a 500-unit batch. What you lose is the detail: the page cannot show that the 68 units are the ones dragging the batch down, and in a mixed batch that is usually the useful finding. When the spread between your cheapest and dearest units is wide, splitting the batch into two runs of this page tells you more than averaging them does.

The margin is 30 percent — is that good?

This page will not tell you, and it would be misleading if it tried. A margin is only meaningful against your own history, your sector and what the money could earn elsewhere; supermarkets run on single-digit margins and software companies run on eighty. What the page does tell you is the shape of your own numbers: whether the batch clears its fixed costs, how far the break-even point is from the quantity you expect, and how the margin moves when you change the price. Those comparisons are answerable without knowing what a good margin is.

• Profit — the glossary definition of what is left after costs, and the distinction between the profit on a sale and the profit a business finally keeps — Investor.gov, U.S. Securities and Exchange Commission (United States)
• Operating Expenses — the definition of the costs of running a business that are not the cost of the goods, which is the line between the unit cost and the fixed costs field above — Investor.gov, U.S. Securities and Exchange Commission (United States)
• Publication 334 (2025), Tax Guide for Small Business — how the cost of goods sold is worked out for a business that buys and resells, which is the figure that belongs in the unit cost field — Internal Revenue Service (United States)