Markup vs margin calculator
Enter what an item costs you, then a markup, a margin or a selling price. The other two follow, so you can see exactly what a "50%" really means.
| Markup | Margin | Price ÷ cost | Action |
|---|---|---|---|
| 10% | 9.1% | 1.1 × | |
| 20% | 16.7% | 1.2 × | |
| 25% | 20% | 1.25 × | |
| 33.33% | 25% | 1.3333 × | |
| 40% | 28.6% | 1.4 × | |
| 50% | 33.3% | 1.5 × | |
| 60% | 37.5% | 1.6 × | |
| 75% | 42.9% | 1.75 × | |
| 100% | 50% | 2 × | |
| 150% | 60% | 2.5 × | |
| 200% | 66.7% | 3 × | |
| 300% | 75% | 4 × |
Selling price
$18.00
$6.00 profit on a $12.00 cost
- Markup (on cost)
- 50%
- Margin (on price)
- 33.33%
Cost $12.00Profit $6.00
The price is 1.5 × the cost. A 50% markup and a 33.3% margin describe the same $6.00 profit: markup divides it by the cost, margin by the price.
Educational estimates, not financial advice. Need a full cost first? Use the handmade pricing calculator.
Two ways to describe the same profit
Markup compares your profit with what the item cost you; margin compares it with what you sold it for. Sell something that cost $12 for $18 and the $6 profit is a 50% markup but only a 33.3% margin, because the price is bigger than the cost.
Markup = (price − cost) ÷ cost
Margin = (price − cost) ÷ price
Margin = markup ÷ (1 + markup)
Markup = margin ÷ (1 − margin)
Mixing them up is a classic pricing mistake. A shop that wants a 50% margin needs a 100% markup on what it pays you, not 50%. Margin can never reach 100%, because the item would have to cost nothing, while markup has no upper limit.
Type a cost, then a markup, a margin or a price, and the calculator keeps the other two in step. The table lists common pairs; choose Use on any row to try it.
Sources
- Patriot Software, Margin vs. Markup: Chart, Infographic, & More: the margin and markup formulas and the conversions between them.
Questions
Which one should I use to set prices?
Whichever the person you are talking to uses, as long as you both know which it is. Makers tend to think in markup (cost times something); shops and accountants tend to talk about margin. Keystone pricing is a 100% markup, which is a 50% margin.
Why can't I enter a 100% margin?
A 100% margin means the whole price is profit, so the cost would be zero. As the margin gets close to 100% the price needed climbs without limit: a 90% margin already needs ten times the cost.
What if my price is below cost?
Both percentages turn negative and the result shows the loss on each item. That can be a deliberate clearance price, but make sure your other sales make up for it.