Enter your cost and selling price to see the profit, markup percentage, and margin percentage, two figures that are easy to mix up.
Cost ($):
Selling price ($):
How It Works
Markup is profit expressed as a percentage of cost, while margin is the same profit expressed as a percentage of the selling price. They use the same profit figure but different denominators, which is why they are never the same number.
How to Use This Tool
- Enter what the item costs you.
- Enter the price you sell it for.
- Click Calculate to see profit, markup, and margin.
Confusing markup with margin is a common pricing mistake; a 50% markup on cost is only a 33.3% margin on the selling price, not 50%.
Did You Know?
- Margin can never reach 100%, since selling price always includes the cost, but markup has no such ceiling.
- Retailers commonly plan pricing around a target margin percentage rather than a markup percentage, since margin ties directly to revenue.
Frequently Asked Questions
Which one should I use for pricing decisions?
Margin is usually more useful for financial planning since it is a percentage of revenue, but markup is often easier to apply directly at the point of setting a price from cost.
Why is my markup percentage always higher than my margin percentage?
Because markup divides profit by the smaller number (cost) while margin divides the same profit by the larger number (selling price), markup will always be numerically higher whenever there is a profit.