Margin & Markup Calculator
Is a 60% markup the same as a 60% margin? Not even close — and pricing a product on the wrong one quietly erases profit. Enter cost and price, or work backward from the margin or markup you want to charge.
Margin (profit ÷ price)
37.5%
Markup (profit ÷ cost)
60.0%
Same sale, two different percentages — margin is measured against the price, markup against the cost.
Selling price
$80.00
Profit per unit
$30.00
A $50 cost sold at $80 is a 60% markup but only a 37.5% margin — quoting one when a client means the other is one of the most expensive mix-ups in small-business pricing. Markup is always the larger number for a profitable sale.
Margin vs. Markup, Once and for All
Both describe the same $30 of profit on a $50 cost sold at $80 — they just divide by different numbers. Margin divides by the price: 30 ÷ 80 = 37.5%. Markup divides by the cost: 30 ÷ 50 = 60%. Markup is always the bigger number, and the gap widens as prices rise: a 100% markup (doubling your cost) is only a 50% margin. To hit a target margin, price = cost ÷ (1 − margin); to apply a markup, price = cost × (1 + markup).
Markup → margin conversion
Markup Margin 10% 9.1% 20% 16.7% 25% 20% 33.3% 25% 50% 33.3% 100% 50% margin = markup ÷ (1 + markup)
Frequently Asked Questions
What's the difference between margin and markup?
Margin is profit as a percentage of the selling price; markup is the same profit as a percentage of the cost. Sell a $50 item for $80 and the $30 profit is a 37.5% margin (30 ÷ 80) but a 60% markup (30 ÷ 50). Markup is always the larger number on a profitable sale, and confusing the two means underpricing.
How do I price a product to get a 40% margin?
Divide the cost by (1 − margin), don't multiply by 1.4. A $50 cost priced for a 40% margin is 50 ÷ 0.6 = $83.33. Multiplying by 1.4 gives $70 — which is only a 28.6% margin, because the 40% you added was measured against cost, not price.
Why is a 100% markup only a 50% margin?
Doubling a $50 cost gives a $100 price with $50 profit. Measured against cost, that's 100% markup; measured against the $100 price, the same $50 is a 50% margin. The general conversion is margin = markup ÷ (1 + markup), which is why margin can never reach 100% no matter how large the markup.
What is keystone pricing?
Keystone is the traditional retail practice of doubling the wholesale cost — a 100% markup, or 50% gross margin. It survives because the 50% gross margin historically covered a typical retailer's rent, staff, and shrinkage with profit left over. Many categories now price below keystone (groceries, electronics) or above it (jewelry, eyewear) depending on turnover.