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Markup & Margin Calculator

Convert between markup and margin percentages instantly. Calculate selling price from cost and desired profit.

Calculation Mode

Cost Price

Selling Price

Markup vs. Margin: What's the Difference?

Markup and margin are two of the most commonly confused concepts in business pricing. While both measure the relationship between cost and selling price, they use different bases for the calculation, leading to very different percentages for the same transaction.

Markup

Markup is the percentage added to the cost price to arrive at the selling price. The formula is:

Markup % = ((Selling Price - Cost) / Cost) × 100

For example, if a product costs $50 and you sell it for $75, the markup is (75 - 50) / 50 × 100 = 50%.

Margin

Margin (also called gross margin) is the percentage of theselling price that is profit. The formula is:

Margin % = ((Selling Price - Cost) / Selling Price) × 100

Using the same example ($50 cost, $75 sell), the margin is (75 - 50) / 75 × 100 = 33.33%.

Why This Matters

A 50% markup does not equal a 50% margin. A 50% markup results in only a 33.33% margin. If you confuse the two when setting prices, you could significantly under-price your products. Many businesses target a specific margin (e.g., 40%) but accidentally apply that number as a markup, leaving money on the table.

Quick Reference

A 100% markup means you doubled the cost — the margin is 50%.
A 50% margin means half the selling price is profit — the markup is 100%.
Margin will always be a smaller number than markup for the same transaction.
The multiplier (selling price ÷ cost) is the fastest way to apply markup: a 1.5x multiplier = 50% markup.

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How to Use the Markup & Margin Calculator

1
Enter the cost price
Input the cost you paid to acquire or produce the item.
2
Enter selling price or markup percentage
Provide either the selling price you want to charge or the markup percentage you want to apply. The calculator will derive the other value.
3
View margin and markup
Review both the markup percentage and profit margin, along with the dollar amount of profit per unit sold.

Frequently Asked Questions

What is the difference between markup and margin?

Markup is the percentage added to cost to determine the selling price, calculated as (selling price minus cost) divided by cost. Margin is the percentage of the selling price that is profit, calculated as (selling price minus cost) divided by selling price. For example, an item costing $60 sold for $100 has a 66.7% markup but a 40% margin. Markup is always a larger number than margin for the same transaction. Many business mistakes arise from confusing these two metrics.

How do I calculate selling price from cost and desired markup?

Multiply your cost by (1 + markup percentage as a decimal). For example, if your cost is $50 and you want a 60% markup: $50 times 1.60 = $80 selling price. To work backwards from a desired margin, divide cost by (1 minus margin percentage). For a 40% margin on the same $50 cost: $50 / (1 - 0.40) = $83.33. This calculator handles both directions and converts between markup and margin instantly.

What markup should I use for my industry?

Typical markups vary widely by industry. Grocery stores operate on 5-15% markup. Clothing retail uses 50-100% markup (keystone pricing). Restaurants mark up food 200-400%. Jewelry and accessories often use 100-300% markup. Software and digital products can have markups exceeding 500% due to minimal variable costs. The right markup depends on your operating costs, competitive landscape, perceived value, and sales volume. Higher markups require fewer sales to break even but may reduce demand.

How do I convert between markup and margin?

To convert markup to margin: margin = markup / (1 + markup). For example, a 50% markup gives a margin of 0.50 / 1.50 = 33.3%. To convert margin to markup: markup = margin / (1 - margin). A 33.3% margin gives a markup of 0.333 / 0.667 = 50%. Quick reference: 25% markup = 20% margin, 50% markup = 33.3% margin, 100% markup = 50% margin, 200% markup = 66.7% margin. These formulas apply regardless of currency or price level.

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