Margin and Markup Calculator

How to use the margin and markup calculator

1. In What do you know?, choose the two values you have: Cost and price, Cost and margin, Cost and markup, Price and margin or Price and markup.
2. Fill in the fields that appear: Cost, Selling price, Margin (%) or Markup (%), and choose the Currency.
3. Read the results: the Cost, the Selling price, the Profit, the Gross margin, the Markup and the Multiplier (price ÷ cost). How it was calculated shows the formulas, and Copy copies the results.
4. To translate a percentage quickly, use Margin ↔ markup conversion: choose Margin → markup or Markup → margin and type the percentage.
5. The Margin and markup table lists the markup, multiplier, selling price and profit for common margins from 5% to 90%, for your cost.

Margin vs. markup: the difference

Both describe the same profit, but they divide it by different amounts:

• Margin (gross margin, profit margin) = profit ÷ selling price
• Markup = profit ÷ cost

An item that costs $60 and sells for $100 makes $40 of profit. Its margin is 40 / 100 = 40%, and its markup is 40 / 60 = 66.67%. The markup is always larger than the margin (for a profitable item), and a margin can never reach 100%, while a markup can be 200% or more.

Mixing them up is expensive. If you want a 40% margin but add a 40% markup to a $60 cost, you sell at $84 and your real margin is only 28.6%.

Formulas

With a cost C, a price P, a margin g and a markup m (as decimals):

• profit = P − C
• g = (P − C) / P and m = (P − C) / C
• price from a margin: P = C / (1 − g)
• price from a markup: P = C × (1 + m)
• cost from a price: C = P × (1 − g) = P / (1 + m)
• markup from a margin: m = g / (1 − g)
• margin from a markup: g = m / (1 + m)

Examples: a 50% margin equals a 100% markup (the price is double the cost); a 25% markup equals a 20% margin; a 20% margin equals a 25% markup. Prices are rounded to the cent. A negative margin means the item is sold at a loss.