Margin vs Markup Calculator
Profit, markup percent, and margin percent from cost and price.
What it does
Markup and margin describe the same profit from opposite ends. Markup asks how far price climbs above cost, dividing by cost. Margin asks what share of the price stays as profit, dividing by price. Same dollars, different denominators, different percents.
The tool above takes cost and selling price. It returns profit per unit with both percents side by side.
Retailers think margin because shelves compete on price points and every point of price is revenue share. Suppliers and craftspeople think markup because cost bases anchor their quotes. Mixing the two misprices either way.
The conversion runs one line: margin equals markup divided by one plus markup. A 50% markup converts to 33.33% margin, while 100% markup, keystone pricing, lands exactly at 50% margin.
How to use
- Enter true unit cost landed, with shipping and fees.
- Enter the selling price before discounts.
- Read margin for shelf math, markup for cost-plus quotes.
- Convert with margin = markup / (1 + markup) when crossing over.
Formula
- profit
- Dollars kept per unit before overhead.
- / cost
- Markup base: how much cost grows.
- / price
- Margin base: what share of revenue stays.
Zero cost breaks markup with division by zero while margin reads 100%. Free goods still need margin thinking for fees and time.
Worked example
Example: $60 cost, $100 price
Unit cost 60, selling price 100.
- Profit: 100 - 60 = $40.00.
- Markup: 40 / 60 = 0.6667, shown as 66.67%.
- Margin: 40 / 100 = 0.40, shown as 40%.
- Check: 66.67 / 1.6667 = 40. Same answer crossed over.
Reference table
| Markup | Margin | On $100 price |
|---|---|---|
| 25% | 20% | $20 profit |
| 50% | 33.33% | $33.33 profit |
| 66.67% | 40% | $40 profit |
| 100% | 50% | $50 profit |
| 300% | 75% | $75 profit |
Limits
- Per unit only. Overhead and volume sit outside.
- Discounts move realized margin below list math.
- Zero cost breaks markup division.
- Tax treatment follows jurisdiction, not this page.
Common mistakes
- Quoting 40% markup while the buyer hears margin.
- Pricing off wholesale cost while retail fees bite.
- Forgetting card fees that shave margin points.
- Rounding cost down and margin with it.
- Chasing margin while volume dies.
Try it yourself
Quick checks. Answers sit tucked under each question.
Cost $25, price $50. Markup and margin?
Profit $25. Markup 100%. Margin 50%.
Want 30% margin on $70 cost. Price?
Price = 70 / (1 - 0.30) = $100.
Questions
Margin or markup: which to use?
Margin for revenue share thinking, markup for cost-plus quoting. Convert when crossing.
Can margin exceed 100%?
No on positive prices. Markup has no ceiling.
What is keystone pricing?
Doubling cost: 100% markup, 50% margin. Classic retail rule of thumb.
How do discounts hit margin?
Hard. Ten percent off a 40% margin item leaves about 33%.
What margin is healthy?
Varies wildly: groceries single digits, software near ninety. Compare inside the trade.
Do fees change the math?
Yes. Add card, platform, and shipping fees to cost first, then compute.