Markup vs Margin Calculator
Convert between markup and margin instantly, calculate the correct selling price, and understand why these two numbers are different. Enter your cost and either a markup or margin percentage to see the full pricing breakdown.
Your total cost to produce or acquire the item, including materials, labor, and any other direct costs.
Choose whether you are entering a markup percentage (based on cost) or a margin percentage (based on selling price).
Enter the markup percentage (how much to add on top of cost) or margin percentage (what portion of the selling price is profit), depending on your selection above.
Markup and margin are two of the most commonly confused pricing concepts in business. They both describe the relationship between cost and selling price, but they use different denominators and produce different percentages for the same transaction. This calculator lets you enter a cost and either a markup percentage or a margin percentage, then shows you the selling price, profit amount, and the equivalent value in the other metric so you can price products correctly and communicate clearly with suppliers, partners, and accountants.
How It Works
Markup and Margin Formulas
Markup Mode: Selling Price = Cost × (1 + Markup%); Margin Mode: Selling Price = Cost ÷ (1 − Margin%)When calculating from markup, the selling price equals cost multiplied by one plus the markup percentage. When calculating from margin, the selling price equals cost divided by one minus the margin percentage. Both formulas produce a selling price from which you can derive the other metric.
Markup is calculated as (Selling Price − Cost) ÷ Cost. It expresses profit relative to what you paid for the item.
Margin is calculated as (Selling Price − Cost) ÷ Selling Price. It expresses profit relative to the revenue you receive.
The same transaction always has a higher markup percentage than margin percentage because markup divides by the smaller number (cost) while margin divides by the larger number (selling price).
For example, a $25 cost with a 50% markup produces a $37.50 selling price and a 33.3% margin. The same $25 cost with a 50% margin produces a $50.00 selling price and a 100% markup.
Converting between them: Margin = Markup ÷ (1 + Markup); Markup = Margin ÷ (1 − Margin).
Important Notes:
- •This calculator handles single-item pricing. For bundled products or tiered pricing, apply the formulas to each item or tier separately.
- •Markup and margin calculations assume a single cost figure. If your cost varies by order size or supplier, use your average or expected cost.
- •Margin percentage must be less than 100% because a 100% margin would mean the product has zero cost, which is not realistic for physical goods.
- •This tool does not account for volume discounts, promotional pricing, or competitive market positioning, which may require you to adjust the final selling price.
- •In accounting, gross margin refers specifically to revenue minus cost of goods sold divided by revenue, while net margin includes all operating expenses.
Worked Example
A small business owner buys a product for $25 and wants to apply a 50% markup. They want to see the selling price, profit, and what the equivalent margin percentage is.
Inputs:
- cost:25
- calculation Mode:markup
- percentage Value:50
Result:
With a 50% markup on a $25 cost, the selling price is $37.50 and the profit per unit is $12.50. The equivalent profit margin is 33.3%. This means one-third of each sale is profit when expressed as a margin.
Who Is This Calculator For?
- small business owners
- retail managers
- ecommerce sellers
- procurement professionals
- accounting students
Frequently Asked Questions
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Guides & Comparisons
- Markup vs Margin: What's the Difference and Why It Matters
This guide explains the difference between markup and profit margin, shows the formulas for each, demonstrates how to convert between them, and highlights common pricing mistakes that come from confusing the two.
- How to Calculate Your Break-Even Point
This guide explains break-even analysis from the ground up, covering fixed costs, variable costs, contribution margin, and the break-even formula, with practical examples for small business owners.
- How Etsy Fees Work: A Complete Breakdown for Sellers
A clear explanation of every fee Etsy charges sellers, including listing fees, transaction fees, payment processing fees, and offsite ads fees, with a worked example showing the total cost of a typical sale.
- Etsy Fee Calculator vs Amazon Seller Margin Calculator
Etsy charges a combination of listing fees, transaction fees, payment processing, and optional offsite ads fees. Amazon charges referral fees by category, potential FBA fulfillment fees, and a monthly subscription for professional sellers. The better platform depends on your product type, price point, fulfillment preference, and how you plan to drive traffic.