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Margin & markup calculator
Convert between margin and markup instantly. Calculate profit margin from cost and selling price. Three modes, no signup, no ads.
Calculate margin & markup
Method
How margin & markup work
What is profit margin?
Profit margin is the percentage of revenue that is profit:
Margin % = ((Revenue - Cost) / Revenue) x 100
Sell a product for $100 with a $75 cost and the margin is 25%. Margin is always expressed as a percentage of the selling price.
What is markup?
Markup is the percentage added to cost to arrive at the selling price:
Markup % = ((Revenue - Cost) / Cost) x 100
Same example, $100 sale on $75 cost: the markup is 33.33%. Markup is always expressed as a percentage of the cost.
Converting between the two
Markup % = Margin % / (100% - Margin %) Margin % = Markup % / (100% + Markup %)
Margin is always lower than markup for the same transaction because margin uses the larger number (revenue) as its base, while markup uses the smaller number (cost).
Questions
Frequently asked
- What is the difference between markup and margin?
- Margin is profit as a percentage of revenue (selling price), while markup is profit as a percentage of cost. For a $100 sale with $75 cost: margin is 25% (profit/revenue) and markup is 33.33% (profit/cost). Margin is always lower than markup for the same transaction.
- How do you convert markup to margin?
- To convert markup to margin, use the formula: Margin = Markup / (1 + Markup). For example, a 50% markup equals a 33.33% margin: 0.50 / (1 + 0.50) = 0.3333 or 33.33%.
- What is a good profit margin?
- Good profit margins vary by industry. Retail typically sees 2-5% net margins, software companies 15-25%, and professional services 15-40%. Gross margins are higher: retail 25-50%, software 60-80%, services 50-70%. Compare your margins to industry benchmarks for the most relevant assessment.
- How do you calculate selling price from cost and margin?
- To find the selling price from cost and desired margin, use: Selling Price = Cost / (1 - Margin%). For example, if your cost is $60 and you want a 40% margin: $60 / (1 - 0.40) = $60 / 0.60 = $100.
- Why is margin always less than markup?
- Margin uses revenue (the larger number) as its denominator, while markup uses cost (the smaller number). Since dividing by a larger number gives a smaller result, margin percentage is always less than markup percentage for the same profit amount.
- What is a margin multiplier?
- A margin multiplier (or cost multiplier) is the factor you multiply cost by to get the selling price. For a 25% margin, the multiplier is 1.33x (calculated as 1 / (1 - 0.25)). Multiply your cost by this number to instantly get the correct selling price.
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