Markup Calculator
Calculate markup percentage from cost and price, or find the selling price from cost and a target markup. Instantly see the difference between markup and margin.
Markup vs. Margin: The Key Difference
Markup and margin are often confused but they measure the same profit from different reference points:
- Markup = (Selling Price − Cost) ÷ Cost × 100. Profit as a % of cost.
- Margin = (Selling Price − Cost) ÷ Selling Price × 100. Profit as a % of revenue.
A product costing $10 sold for $25 has a 150% markup but only a 60% margin. Confusing these two is one of the most common pricing mistakes in business.
Markup to Margin Conversion
To convert markup to margin: Margin = Markup ÷ (1 + Markup). A 100% markup = 50% margin. A 200% markup = 67% margin. To go the other way: Markup = Margin ÷ (1 − Margin). A 40% margin = 67% markup.
Typical Markup by Industry
Retail clothing: 100–300%. Electronics: 15–30%. Jewelry: 50–200%. Restaurants (food cost): 200–350% markup on raw ingredients. Software: effectively unlimited (near-zero COGS). When setting your markup, always ensure the resulting margin is sufficient to cover operating expenses and generate net profit after overhead — use the Profit Margin Calculator to model the full picture.
Frequently Asked Questions
Why is markup always higher than margin?
Because markup uses the smaller number (cost) as the denominator, while margin uses the larger number (selling price). The same dollar profit divided by a smaller base always produces a larger percentage. This is why a "50% markup" and "50% margin" are very different things — the former gives you 33% margin, while the latter requires a 100% markup.
What markup do I need to achieve a 30% margin?
To achieve a 30% margin, use the formula: Markup = Margin ÷ (1 − Margin) = 0.30 ÷ 0.70 = 42.9% markup. A product costing $100 would need to sell for $142.86. Always verify that this selling price is competitive in your market before applying it.
Should I set prices using markup or margin?
Retailers and wholesalers often use markup because pricing starts from cost. Financial analysts use margin because it relates to revenue. For setting prices: start with your cost and desired margin, then calculate the required selling price. For analyzing profitability: always use margin, as it's the correct measure of what percentage of revenue you keep.
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