Profit Margin Calculator Nigeria — Gross Margin & Markup

Gross Margin (also called gross profit margin) = (Selling Price - Cost Price) / Selling Price × 100%. It shows what percentage of the selling price is profit before operating expenses. For example, if you buy for ₦1,000 and sell for ₦1,500, your gross margin is 33.3%.

Margin is calculated as profit divided by selling price (revenue perspective). Markup is calculated as profit divided by cost price (cost perspective). A 50% markup = 33.3% margin. Always clarify which basis is being used to avoid confusion in business discussions.

Target margins depend heavily on the industry. Retail grocery: 5–15%. Fashion/clothing retail: 30–50%. Restaurant/food: 10–25%. Technology services: 40–70%. Manufacturing: 15–35%. In Nigeria's high-cost environment (generator costs, import duties, logistics), margins often need to be higher than global benchmarks to be sustainable.

If you know your cost and desired margin, use the "Calculate Selling Price" mode: enter cost and desired margin %, and the calculator gives you the required selling price. If you know cost and selling price, enter both to see your actual margin and markup percentages.

No — for margin analysis, always use the ex-VAT (excluding VAT) selling price. VAT collected is a liability you remit to FIRS; it is not your revenue. Your margin should be calculated on the actual selling price you retain, not the total amount paid by the customer including VAT.