Markup vs Margin Calculator
Convert between markup and profit margin, and calculate selling prices from wholesale cost.
Markup vs. margin formulas
The essential formulas connecting cost, revenue, and gross profit:
Markup Percentage
Profit generated relative to wholesale cost.
Profit Margin
Profit retained relative to final selling price.
Pricing examples
40% markup on a $50 cost
A retail merchant purchases inventory for $50.00 and adds a 40% markup.
Target 50% profit margin (Keystone pricing)
To achieve a 50% margin on a $30.00 item, double the cost (100% markup).
Frequently asked questions
What is the difference between markup and profit margin?
Markup is the percentage added to wholesale cost to set the retail selling price: Markup (%) = (Profit ÷ Cost) × 100. Profit margin is the percentage of the final selling price that remains as profit: Margin (%) = (Profit ÷ Selling Price) × 100. Profit margin is always mathematically lower than markup for any positive profit.
If I want a 25% profit margin, what markup should I use?
To achieve a 25% profit margin, you need a 33.33% markup: Markup = Margin ÷ (1 − Margin) = 0.25 ÷ 0.75 = 33.33%.
Why do retailers confuse markup and margin?
Because both express profit as a percentage, but on different bases. Markup is based on what you paid (cost), whereas margin is based on what you receive (revenue). Confusing the two causes retailers to underprice goods and miss profit targets.
Related Calculators
Topically linked tools for related calculations and conversions.
Commission Calculator
Calculate sales commission pay, effective earnings, and total compensation from revenue, commission rates, and base salary with verified decimal steps.
Discount Calculator
Calculate the discounted sale price, total money saved, and stacked extra percent-off coupons with exact decimal arithmetic, sales tax, and full step math.
Sales Tax Calculator
Calculate exact sales tax amount and total checkout price, or reverse calculate pre-tax price from a tax-inclusive total with step-by-step decimal arithmetic.
Reverse Percentage Calculator
Find the original price or value before a percentage discount, sales tax, or price increase. Includes reverse percentage formulas and step-by-step math.