Markup vs Margin Calculator
Calculate both markup percentage and profit margin from cost and price.
Results
Markup and margin both measure profitability but from different perspectives. Markup is profit as a percentage of cost. Margin is profit as a percentage of selling price. They are often confused but give different numbers for the same transaction. A 50% markup equals a 33.3% margin. Understanding both is essential for pricing decisions.
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Frequently asked questions
Markup = (Price - Cost) / Cost × 100. Margin = (Price - Cost) / Price × 100. For a $60 cost and $100 price: markup = 66.7%, margin = 40%. Markup is always higher than margin for the same transaction.
A 50% margin requires a 100% markup (double the cost). Cost $50 → sell at $100: markup = ($50/$50) × 100 = 100%, margin = ($50/$100) × 100 = 50%.
Margin is more useful for financial analysis because it relates profit to revenue. Markup is more practical for setting prices because it tells you how much to add to your cost. Know both and communicate whichever your audience expects.
Retail markup varies widely: groceries 5-25%, clothing 50-100%, electronics 10-40%, restaurants 200-400% on food. Luxury goods and jewelry can have 100-300% markup.
Margin to markup: markup = margin / (1 - margin). Markup to margin: margin = markup / (1 + markup). Example: 40% margin = 0.4 / 0.6 = 66.7% markup.