How to use
- Enter what the item cost you.
- Choose markup if your percent is based on cost. Choose margin if it is based on the selling price.
- Enter that percent and press Calculate.
- Read the price, then check the other percent so you do not mix the two words up later.
How it's calculated
From markup: price = cost × (1 + markup ÷ 100). Profit = price − cost. Margin = profit ÷ price × 100.
From margin: price = cost ÷ (1 − margin ÷ 100). That division is why a margin of 100 percent is rejected: the price would be undefined. Markup = profit ÷ cost × 100.
Worked example
A $50 cost with a 40 percent markup sells for $70. Profit is $20, which is a 28.57 percent margin because 20 ÷ 70 is about 0.2857. The same $50 cost with a 40 percent margin sells for $83.33, because 50 ÷ 0.60 = 83.33. That profit is $33.33, a 66.67 percent markup on cost.
Assumptions
One cost and one percent. No shipping, no tax, and no volume discount. A margin at or above 100 percent is refused.
FAQ
Why is a 40 percent margin a higher price than a 40 percent markup?
Markup is a percent of the smaller number, the cost. Margin is a percent of the larger number, the price. The same percent of a larger base is a different price.
Can I start from a price I already charge?
Not on this form. Enter the cost and the percent you want. If you already know both cost and price, margin = (price − cost) ÷ price.
Is markup the same as a discount?
No. A discount reduces a selling price. Markup builds a selling price up from a cost. The discount calculator on this site does the reduction.
What if my cost is zero?
A zero cost with a markup percent stays at a zero price. A zero cost with a margin still solves the formula and can produce a zero price.