How to use
- Choose what you know: cost and price, cost and target margin, or cost and target markup.
- Enter the numbers.
- See profit, margin and markup side by side, plus prices for common margins.
Margin and markup formulas
Profit = price − cost
Margin = profit ÷ price × 100
Markup = profit ÷ cost × 100
Price for a target margin = cost ÷ (1 − margin)
Price for a target markup = cost × (1 + markup)
Examples
- Cost $60, price $100: profit $40, a 40% margin and a 66.67% markup.
- Cost $1.30 with a 60% markup: price $2.08, which is a 37.5% margin (OpenStax).
- Cost $70, target margin 30%: $70 ÷ 0.7 = $100.
Margin vs markup
Margin is the share of the selling price that is profit. Markup is the profit compared with the cost.
The same sale always has a bigger markup than margin, because the cost is smaller than the price. Mixing them up underprices: a 40% markup is only a 28.57% margin.
Margin to markup conversion
| Margin | Markup |
|---|---|
| 10% | 11.11% |
| 15% | 17.65% |
| 20% | 25% |
| 25% | 33.33% |
| 30% | 42.86% |
| 40% | 66.67% |
| 50% | 100% |
| 60% | 150% |
| 75% | 300% |
Markup = margin ÷ (1 − margin)
Margin = markup ÷ (1 + markup)
A 50% markup is a 33.33% margin, and a 100% markup (doubling the cost) is a 50% margin.
Gross margin, net margin and limits
Enter the cost of the goods to get gross margin, as accountants define it: (net sales − cost of goods sold) ÷ net sales. Include your other costs to approximate net margin.
A margin can only reach 100% if the cost is zero. Markup has no upper limit.
When a target-margin price is rounded to the cent, the calculator shows the exact margin at that price.
Planning a sale? The discount calculator shows what a discount does to your price.