Markup vs Margin Calculator

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

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1. Enter the cost price (what you paid for the item). 2. Enter either the selling price, markup percentage, or margin percentage. 3. View both the markup and margin calculated side by side. 4. See the profit amount and the relationship between markup and margin explained. 5. Click the copy button to copy any calculated value.

About This Tool

The markup vs margin calculator clarifies the often-confused relationship between these two essential pricing metrics. Markup is the percentage added to the cost to determine the selling price, while margin is the percentage of the selling price that represents profit. Though related, they yield different numbers and serve different purposes.

This calculator lets you convert between markup and margin instantly, calculate selling prices from cost and desired markup or margin, and see the profit amount for any scenario. It is an indispensable tool for retailers, wholesalers, e-commerce sellers, and anyone involved in product pricing.

Understanding the difference between markup and margin prevents costly pricing mistakes. A 50% markup results in a 33.3% margin - not 50%. This calculator makes the relationship transparent so you can set prices that achieve your target profitability.

Formula / How It Works

Markup = (Selling Price - Cost) / Cost x 100. Margin = (Selling Price - Cost) / Selling Price x 100. Margin = Markup / (1 + Markup). Markup = Margin / (1 - Margin).

Frequently Asked Questions

Markup is the percentage added to the cost price to get the selling price (based on cost). Margin is the percentage of the selling price that is profit (based on revenue). For example, buying at $60 and selling at $100 gives a 66.7% markup but a 40% margin.
Margin = Markup / (1 + Markup). For example, a 50% markup (0.50) converts to: 0.50 / 1.50 = 0.333, or 33.3% margin. The margin is always lower than the markup percentage for the same pricing.
Markup = Margin / (1 - Margin). For example, a 40% margin (0.40) converts to: 0.40 / 0.60 = 0.667, or 66.7% markup. The markup is always higher than the margin percentage for the same pricing.
Both are useful. Markup is simpler for setting prices from cost (just add a percentage). Margin is better for analyzing profitability from revenue. Retailers often use markup for day-to-day pricing and margin for financial reporting and analysis.
Markups vary widely. Grocery stores typically use 5-25%, clothing retailers 50-100%, restaurants 200-400% on food, jewelry 100-300%, and software/digital products can have markups of 500% or more due to low marginal costs.

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