Profit Margin Calculator (VND)
If you sell anything in Vietnam — an online shop, a café, a small import business — profit margin is the single number that tells you how much of each dong of revenue you actually keep after the cost of the goods. The core formula is short: gross profit = revenue − cost, and then profit margin = gross profit ÷ revenue.
The most common mistake new sellers make is confusing margin with markup. They sound similar but divide by different denominators: margin divides profit by revenue (the selling price), while markup divides the same profit by cost. Because revenue is larger than cost whenever you make a profit, markup always looks bigger. The textbook example: you buy an item for 100.000.000 VND and sell it for 150.000.000 VND, so you "mark it up 50%" (a 50.0% markup) — but your actual profit margin is only 33.3%. The same trade, two very different percentages.
With this tool's default inputs — 100.000.000 VND revenue against 70.000.000 VND cost — gross profit is 30.000.000 VND, which is a 30.0% margin but a 42.9% markup. The calculator above shows all three figures at once so you never mix them up when pricing or quoting numbers to a partner. One caveat: this is gross profit — it subtracts only the cost of goods, not your rent, staff, shipping, or taxes. Your net take-home profit will be lower.
How the calculator computes the figures
The three core formulas
Given revenue (selling price) and cost, the tool computes:
| Metric | Formula | Denominator |
|---|---|---|
| Gross profit | Revenue − Cost | — |
| Profit margin | Gross profit ÷ Revenue | Selling price |
| Markup | Gross profit ÷ Cost | Cost price |
The whole point is the different denominators. Since revenue exceeds cost on any profitable sale, markup is always the larger number for the same profit. Never advertise a "50% margin" when you really mean a 50% mark-on over cost — they are not the same claim, and the gap widens fast.
Verify it with the defaults
For 100.000.000 VND revenue and 70.000.000 VND cost:
- Gross profit = 100.000.000 − 70.000.000 = 30.000.000 VND
- Margin = 30.000.000 ÷ 100.000.000 = 30.0%
- Markup = 30.000.000 ÷ 70.000.000 = 42.9%
Type those two numbers into the widget and the results will match line for line.
Converting between margin and markup
- Markup to margin: margin = markup ÷ (1 + markup).
- Margin to markup: markup = margin ÷ (1 − margin).
Example: a 50.0% markup → margin = 0.5 ÷ 1.5 = 33.3%. That single relationship is why a "50% markup" sounds generous while the margin behind it is only a third of revenue.
What this number leaves out
The tool computes gross profit margin — it subtracts only the cost of goods sold. Fixed costs (rent, salaries, marketing, logistics) and taxes (presumptive tax, corporate or personal income tax) are not deducted. Treat the gross margin as a ceiling, not money in your pocket; net margin is always lower. Every figure on this page is pure arithmetic on the revenue and cost you enter — it is not a market data point or a profitability claim about any industry.
Worked example 1: why a 50% markup is only a 33.3% margin
Enter an item that costs 100.000.000 VND and sells for 150.000.000 VND:
| Metric | Value |
|---|---|
| Gross profit | 50.000.000 |
| Markup (over cost) | 50.0% |
| Profit margin (over revenue) | 33.3% |
You marked the cost up by 50%, but because margin divides by revenue (150.000.000 VND) rather than cost, the real figure is 33.3%. When a supplier, investor or accountant asks "what's your margin?", answering 50% would be wrong — the correct answer is 33.3%.
Worked example 2: same 100.000.000 VND price, rising cost
Hold the selling price at 100.000.000 VND (a pure arithmetic figure, not a market price) and let the unit cost climb. The table shows how quickly margin erodes:
| Cost | Gross profit | Profit margin | Markup |
|---|---|---|---|
| 50.000.000 | 50.000.000 | 50.0% | 100.0% |
| 60.000.000 | 40.000.000 | 40.0% | 66.7% |
| 70.000.000 | 30.000.000 | 30.0% | 42.9% |
| 80.000.000 | 20.000.000 | 20.0% | 25.0% |
| 90.000.000 | 10.000.000 | 10.0% | 11.1% |
Reading the table: as cost rises from 50.000.000 to 90.000.000 VND at the same price, margin falls from 50.0% to 10.0%. That is why sellers track cost per batch closely: a supplier raising prices a few percent, if you don't reprice, can wipe out more than half your margin. To find how many units you must sell to break even once fixed costs are included, pair this with FiMo's break-even calculator.
Frequently asked questions
What is the difference between profit margin and markup?
Margin = gross profit ÷ revenue; markup = gross profit ÷ cost. They divide the same profit by different denominators, so markup is always the larger number on a profitable sale. Example: buy for 100.000.000 VND, sell for 150.000.000 VND → a 50.0% markup but only a 33.3% margin. Don't mix them up when pricing or reporting.
What is the profit margin formula?
Gross profit = revenue − cost; profit margin = gross profit ÷ revenue. Verifiable: 100.000.000 VND revenue and 70.000.000 VND cost give 30.000.000 VND gross profit, so margin = 30.000.000 ÷ 100.000.000 = 30.0%. This is the gross margin, before fixed costs and taxes.
How do I set a selling price to hit a target margin?
Convert the target margin to a markup: markup = margin ÷ (1 − margin), then price = cost × (1 + markup). To hit a 33.3% margin: markup = 0.333 ÷ 0.667 = 0.5, so price = cost × 1.5. A 100.000.000 VND cost should sell for 150.000.000 VND. Enter that pair in the tool to confirm the margin reads 33.3%.
Why is a 50% markup only a 33% margin?
Because the two ratios use different denominators. A 50% markup means profit equals half the cost; margin divides that same profit by the larger revenue figure. With cost 100.000.000 VND and price 150.000.000 VND, profit is 50.000.000 VND — that is 50.0% of cost but only 33.3% of revenue. Formula: margin = markup ÷ (1 + markup) = 0.5 ÷ 1.5.
How fast does margin shrink when costs rise?
Quickly, if you hold the price. At a fixed 100.000.000 VND price, a cost of 50.000.000 VND yields a 50.0% margin, but a cost of 90.000.000 VND leaves only 10.0%. Track your cost per batch and reprice promptly when suppliers raise prices.
Is gross profit margin the same as my actual profit?
No. Gross margin subtracts only the cost of goods sold — not rent, salaries, marketing, shipping or taxes. That's why gross margin is always higher than net margin. Treat it as a ceiling, then subtract all fixed costs and taxes to find what you actually keep.