@section('meta_description','Calculate selling price from cost and markup, and see markup and margin side by side since they're often mixed up in pricing.') @section('meta_keywords', '') @section('content')

Markup Calculator

Calculate selling price from cost and markup, and see markup and margin side by side, since they're calculated differently and often get confused.

From Cost & Markup
From Cost & Selling Price

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Markup and margin both describe the profit on a sale, but they're calculated against different base numbers, markup against cost, margin against selling price, similar in structure to how the Percentage Calculator's basic and reverse modes use different base numbers depending on the question. Using one where the other is expected is one of the most common pricing mistakes in small business, which is why every result below is shown as both figures side by side rather than just whichever one was asked for.

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How It Works

Markup % = (Profit ÷ Cost) × 100
Margin % = (Profit ÷ Selling Price) × 100

An item bought for $40 and sold for $60 has $20 profit. As markup, that's 50% (20 ÷ 40). As margin, it's 33.3% (20 ÷ 60). Same sale, two different correct-sounding numbers depending on which base is used.

Where the Confusion Actually Costs Money

Setting retail prices from wholesale cost, comparing profitability across products with different price points, or reading a supplier's stated markup and needing to know what margin that actually represents are all situations where confusing the two figures leads to under- or over-pricing without anyone noticing until profit numbers don't add up.

Retail and E-Commerce Pricing

A small business setting prices from wholesale cost often has a target margin in mind (the percentage of each sale that's actual profit), but pricing software or spreadsheets sometimes default to markup calculations instead. Applying a markup percentage when a margin percentage was intended results in prices that undershoot the actual profitability goal, sometimes by a meaningful amount.

Comparing Supplier Quotes

Different suppliers or industries sometimes quote pricing in markup terms and sometimes in margin terms, and comparing two quotes fairly requires converting one to match the other's basis. A 40% markup and a 40% margin represent very different actual profit levels, even though the number quoted looks identical. Once a final selling price is set, the Sales Tax Calculator can help work out what a customer actually pays after tax is added on top.

Financial Reporting and Forecasting

Margin is generally the more useful figure for forecasting overall revenue and profitability, since it's expressed as a share of the sale itself. Markup is often more intuitive for setting an individual price from a known cost. Businesses that move between the two without converting correctly can end up with pricing and reporting figures that don't reconcile.

Common Mistakes

Using markup and margin interchangeably. A 50% markup is not a 50% margin. They describe the same profit but as a percentage of two different base numbers, and the gap between them grows as the percentage increases.
Setting a target margin using the markup formula. Wanting a 40% margin and applying a 40% markup instead results in a lower margin than intended, since 40% markup on cost only works out to about 28.6% margin.
Forgetting that margin can never reach 100%, while markup can exceed it. Margin is always a portion of selling price, so it approaches but never reaches 100% no matter how high the price. Markup has no such ceiling.
Comparing markup percentages across products with very different margins. Two products can carry the same markup percentage but contribute very differently to overall profitability once other costs are factored in, so markup alone doesn't tell the full pricing story.

Frequently Asked Questions

What's the difference between markup and margin?

Markup is profit as a percentage of cost. Margin is profit as a percentage of selling price. The same dollar profit produces two different percentages depending on which one is used.

How do I convert a markup percentage to a margin percentage?

Margin % = Markup % ÷ (100 + Markup %) × 100. The "From Cost & Selling Price" mode above shows both automatically once you enter a price, or you can compute a selling price from a markup and see the equivalent margin in the "From Cost & Markup" mode.

Which one should I use for pricing decisions?

Margin is generally more directly tied to overall profitability since it's calculated against revenue, but many industries conventionally price using markup on cost. Knowing both avoids confusion when comparing figures from different sources.

Why can margin never reach 100% even at a very high price?

Margin is profit divided by selling price, and selling price always includes the cost as part of it, so there's always some portion of the selling price that isn't pure profit, no matter how high the markup goes.

If I know my desired margin, how do I find the right markup to use?

Markup % = Margin % ÷ (100 − Margin %) × 100. For a target margin of 40%, the required markup works out to about 66.7%, noticeably higher than the margin percentage itself.

@endsection Markup Calculator – See Markup and Margin Together
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