Here's a very easy to use Gross Profit Calculator to help you work out at what price you should be selling a product to make a particular Gross Profit percentage.
It is important to remember that Gross Profit percentage (the profit you actually make when selling an item) is NOT the same as the Mark Up percentage on the cost price of a product.
(More about this lower down the page.)
Mark Up v Gross Profit:
Mark Up is added to the cost price of the item to cover expenses and provide a gross profit. Gross profit is what is left after deducting the costs of the item from the selling price. (N.B. Running expenses need to be deducted to reach the net profit.)
To try and illustrate the difference:
An item costs £50
A Mark Up of 50% is added to set the selling price which becomes £75
But the Gross Profit is only 33.33% (£25) - the difference between selling price and cost price.
It is very important to understand that a Mark Up of 50% does not yield a Gross Profit of 50%
It is surprising how many financial disappointments are caused by this confusion - so be clear in your mind and do not confuse Mark Up with Gross Profit.
The Gross Profit Calculator is provided for the benefit of users at their own risk. Whilst ever effort is made to ensure its accuracy, Pub Assist can not be held liable or responsible for anything that may result from its use. By using the Gross Profit Calculator on this website you agree to the terms and conditions of this disclaimer.