How to Calculate Profit Margin (and Price for It) in Retail (2026)
Gross vs net margin explained with simple formulas, plus how to price products so your margin survives discounts and costs.
Margin is the number that decides whether a busy shop is actually profitable. Understanding gross and net margin — and pricing for them — is the most useful math a retailer can learn. Here it is, simply.
Gross vs net margin
Gross margin = (selling price − cost of goods) ÷ selling price. Net margin subtracts all operating expenses too. Gross tells you product profitability; net tells you business profitability.
Price for the margin you need
Work backwards from a target margin and your true landed cost (including taxes and freight) to set prices that survive discounts and still leave profit.
Watch it live
Per-item and overall margin should be visible on every sale, not guessed at year-end. MyGroce captures margin automatically from cost and price on each bill.
Frequently asked questions
How do I calculate profit margin?
Gross margin = (price − cost) ÷ price; net margin also subtracts operating expenses. Price backwards from a target margin using true landed cost. MyGroce shows per-item and overall margin automatically.
Keep reading
- All MyGroce features
- Inventory software for small business
- Supermarket & grocery billing for small business
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