💰 Margin and Markup Calculator
Calculate both profit margin and markup
How to Use This Calculator
Enter Cost
Input the cost of goods or service - the amount you paid or spent to produce or acquire it.
Enter Selling Price
Enter the selling price - the amount you charge customers for the product or service.
Review Margin and Markup
See both the profit margin (profit as % of price) and markup (profit as % of cost), along with profit amount. Use this to understand both metrics for pricing and profitability analysis.
Formula
Profit = Selling Price - Cost
Profit Margin = (Profit / Selling Price) × 100
Markup = (Profit / Cost) × 100
Example Calculation:
If cost $60, selling price $100:
• Profit = $100 - $60 = $40
• Profit margin = ($40 / $100) × 100 = 40%
• Markup = ($40 / $60) × 100 = 66.7%
About Margin and Markup Calculator
A margin and markup calculator helps you calculate both profit margin and markup percentage from cost and selling price. Profit margin shows profit as a percentage of the selling price, while markup shows profit as a percentage of the cost. Both metrics are important for understanding profitability and pricing strategy. This calculator shows you both values simultaneously, making it easy to understand the relationship between margin and markup.
When to Use This Calculator
- Pricing Analysis: Calculate both margin and markup for pricing decisions
- Profitability Analysis: Understand profit metrics
- Business Planning: Plan pricing and profit goals
- Product Analysis: Compare margin and markup across products
Understanding Margin vs Markup
- Profit Margin: Profit as % of selling price (what you receive)
- Markup: Profit as % of cost (what you paid)
- Relationship: Markup is always higher than margin for the same profit
- Use Cases: Margin for revenue analysis, markup for cost-based pricing
Why Use Our Calculator?
- ✅ Both Metrics: Calculate margin and markup together
- ✅ Pricing Strategy: Make informed pricing decisions
- ✅ Profitability Analysis: Understand profit metrics
- ✅ Business Planning: Plan profit goals and pricing
- ✅ 100% Free: No registration or payment required
Frequently Asked Questions
What's the difference between margin and markup?
Margin is profit as a percentage of selling price (revenue), while markup is profit as a percentage of cost. For example, with cost $60 and price $100: Profit = $40, Margin = 40% (profit / price), Markup = 66.7% (profit / cost). Margin shows profit relative to what you receive, while markup shows profit relative to what you paid. Markup is always higher than margin for the same profit.
Which is better: margin or markup?
Neither is inherently better - they serve different purposes. Margin is better for revenue analysis and understanding profit as a percentage of sales. Markup is better for cost-based pricing and understanding profit relative to cost. Use margin when analyzing revenue and profitability, use markup when pricing based on cost. This calculator shows both so you can use the appropriate metric for your needs.
How do I convert margin to markup?
To convert margin to markup: Markup = Margin / (1 - Margin). For example, with 40% margin: Markup = 40% / (1 - 40%) = 40% / 60% = 66.7%. To convert markup to margin: Margin = Markup / (1 + Markup). For example, with 66.7% markup: Margin = 66.7% / (1 + 66.7%) = 66.7% / 166.7% = 40%. This calculator calculates both directly from cost and price.
What should my margin and markup be?
Target margin and markup depend on your industry, business model, and goals. Generally, 10-20% margin is considered good for most businesses, but this varies by industry. Retail may have 2-5% margins, while software may have 80%+ margins. Markup is typically higher than margin - for example, a 40% margin corresponds to a 66.7% markup. Compare to industry benchmarks and your own historical data.