Margin is the percentage of the selling price that is profit.
Margin = (Price − Cost) / Price × 100
Markup is the percentage of the cost that is added as profit.
Markup = (Price − Cost) / Cost × 100
Example: Buy for $60, sell for $100 → Margin = 40%, Markup = 66.7%
About the Margin Calculator
Margin and markup are often confused. Margin is the percentage of the selling price that is considered profit, while markup is the percentage added atop the cost to achieve that selling price. A 50% markup on a $100 cost gives a $150 selling price, but the margin achieved is only 33.3%. Understanding this difference is crucial for pricing, negotiations, and financial planning.
How to Use
- Select the Cost & Price tab to input standard figures and discover your margin, markup, and gross profit.
- Select the Target Margin tab to backwards calculate your required selling price based on goal numbers.
- Results automatically compute as you type. Real-time, instant analysis.
Frequently Asked Questions
What is the difference between margin and markup?
Margin is the profit as a percentage of the selling price. Markup is the profit added as a percentage of the cost. A 50% markup on a $100 cost gives a $150 selling price, but only a 33.3% margin.
If I know my target margin, can the tool calculate the selling price?
Yes. Use the Target Margin tab: enter the cost and desired margin percentage, and the tool calculates the required selling price and corresponding markup.
What is gross profit?
Gross profit is the absolute difference between revenue and cost: Gross Profit = Revenue − Cost. The margin percentage expresses this as a fraction of revenue.
Why do some industries quote markup while others use margin?
Retail and manufacturing often use markup (cost-based) for pricing decisions. Finance and management accounting typically use margin (revenue-based) for reporting. Confusing the two can lead to significant pricing errors.
Does the tool send data to a server?
No. All calculations run instantly in your browser. No data is sent anywhere.