Work out selling price, profit, margin % and markup % from any two numbers — and see why a 50% markup is only a 33% margin.
Markup ↔ margin conversion
| Markup | Margin | Price for a 100 cost |
|---|
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How to use the Markup vs Margin Calculator
- Choose what you know: cost & price, cost & target margin, cost & markup, or price & margin.
- Enter the two numbers.
- Read the selling price, cost, profit, margin % and markup %. Use the table to convert between markup and margin.
About this tool
Markup and margin describe the same profit from two different angles. Markup is profit as a percentage of cost: markup = (price − cost) ÷ cost. Margin is profit as a percentage of price: margin = (price − cost) ÷ price. Because price is bigger than cost, the margin percentage is always smaller than the markup percentage for the same sale.
Mixing them up is one of the most common pricing mistakes. A business that wants a 40% margin but applies a 40% markup actually earns a 28.6% margin. To convert: margin = markup ÷ (1 + markup) and markup = margin ÷ (1 − margin). To hit a target margin, divide cost by (1 − margin): a 40% margin on a 60 cost means a price of 100, not 84.
Frequently asked questions
What is a good profit margin?
It depends on the industry: grocery retail runs on 1–3% net, restaurants 3–10%, software 20–40%+. Gross margin (before overheads) is typically much higher than net margin.
Is a 100% markup the same as a 50% margin?
Yes. Buying at 50 and selling at 100 is a 100% markup on cost and a 50% margin on price.
Should I price using markup or margin?
Margin, usually — it relates directly to how much of each sale you keep, which is what covers overheads. Markup is handy for quick shelf pricing when you only know the cost.
Does this include tax?
No. Enter cost and price excluding sales tax or VAT; those are collected for the government and are not part of your profit.